One of the easiest ways to turn a profit by day trading stocks is to take advantage of the morning crowd. Most day traders wake up around 9:20 AM to rush to catch the morning rush at 9:30 AM to turn a profit. If you do this then you are trading like everyone else in the world, which significantly increases your odds of failing.
The absolute best time for day traders to wake up for profit is around 5:30 AM. This gives you 30 minutes to collect yourself and start researching trends. Further, you can enter into early morning positions and take advantage of the growing volatility that happens as more day traders wake up.
This article aims to demonstrate how you can use this secret of day trading that typically only professionals know about. Investing in premarket stocks before the opening bell at 9:30 can net you huge returns when done properly.
There are two reasons why this works. The first is that by having a premarket position before other traders wake up will allow you to profit as other traders wake up and buy the stock. Second, most day traders don’t learn how to trade in the premarket. Just by taking advantage of this significantly helps you in your day trading.
Here at Chronohistoria I routinely publish articles that go over investment research, methodologies/strategies, and tips/tricks so that you are better prepared to profit in today’s crazy market.
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Without further ado, let me show you why you need to wake up early to maximize your profit as a day trader.
Waking Up At 5:30 AM On Trading Days
Day Trading can be incredibly profitable. However the professional day traders are close to professional athletes in terms of dedication. If you’re serious about day trading you need to be just as dedicated to even have a chance at succeeding.
A professional day trader won’t trade every day. However on trading days they are up at 5:30 AM ready to turn a profit. This gives them 30 minutes to make a coffee, get dressed, and start reading the events from the night before.
By 6:00 AM some of them have already taken their positions in stocks expected to explode on the opening bell. A professional day trader will set up scanners to look for increasing volatility in the markets and then take safe positions to capture some of this growing volatility.
When done properly the professional day trader will have a position that will only grow as more and more retail traders wake up. This is because average day traders typically treat day trading much like gambling and chase the next big thing.
Waking up at 5:30 AM allows you to find the stock that will explode before the day trading crowd starts to chase it.
An article published by the American Economic Association in 2000 found significant correlations between stock volatility and retail trading sleep patterns. As more traders enter the market this sleep to volatility ratio only grows.
Simply put, waking up before other day traders will allow you to get max profit.
Profession Day Traders Enter Into Positions In The Premarket Before Others Wake Up
It’s no secret, a majority of day traders don’t learn how to enter into positions during the premarket. It’s not hard to learn how to do this. Just by knowing how you are instantly opening up endless possibilities for your portfolio.
Imagine you notice that on social media millions of people are talking about a stock. You and everyone else think the stock is going to explode upwards when the market opens at 9:30 AM.
What if you could enter hours before everyone else when the stock is worth less. This is the beauty of premarket trading.
However it does come with risk. During premarket trading volume is less, which means the spread is larger. When the spread on a stock is larger your risk is more in entering into a position.
As we can see from the above image day traders who wake up early and enter into a position can take advantage of volatility growing. This growing volatility takes place because as other day traders wake up they enter into the position. This trend continues up until the opening bell at 8:00 AM from which volatility explodes upwards.
In the above image the theoretical stock price went up, however this volatility can also force the price downwards. Here you can either use advanced trading strategies to make money regardless of price direction or wait to see how the trend is evolving to take a position.
If you’re interested in an advanced trading strategy that will make money regardless of which way the stock moves you can read this article I did on the Iron Condor trade. It makes money either if the stock goes up or down.
By waking up early, traders can maximize their profit by entering into positions and taking advantage of this volatility increase.
There you have it. Two reasons why day traders should wake up at 5:30 AM on trading days. Waking up early is one of the easiest ways to increase your yearly ROI.
I don’t recommend day trading for people who can’t wake up early. However if you’re driven then you can make a ton of money from day trading. You just have to be more driven than the retail trading crowd. One of the easiest ways to do this is just by waking up at 5:30 AM on trading days.
Here at Chronohistoria I aim to help people on their investing journey. I routinely publish articles that go over investment research, methodologies/strategies, and tips/tricks of the trade so that you are better prepared to profit. Feel free to sign up for the free newsletter to remain up to date on all things investing.
Further, you can check out some of my other articles below.
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Short selling comes with many risks; one of which is that you will have to pay dividends on short positions. This can eat into your profit.
Until we meet again, I wish you the best of luck in your investing journey.