Best Time of Day to Place Trades Using Your Trading Account
Stock markets generally follow specific timings within which orders to buy or sell securities are executed through authorized exchanges. For individual investors managing their investments through a trading account, knowing different time segments during the trading day and how market behavior varies within those windows might help develop more awareness in planning trade entries and exits.
Trading Account Details
A trading account allows a transaction in shares, commodities, and derivatives through stock exchanges. It acts as a medium through which orders are placed and executed in real time. Advanced trading platforms are neither desktop nor mobile interfaces but allow users to monitor live prices, place orders, and view portfolios.
The first step in the journey to trading is opening a trading account with a registered stockbroker. This account, once active, permits users to make transactions during official market hours on listed equities, futures, options, and other securities.
The Regular Market Timings in India
The normal equity markets in India run from 9:15 A.M. to 3:30 P.M. from Mondays to Fridays, other than holidays within the country. Segments of the trading day include:
Pre-opening session: 9:00 A.M. to 9:15 A.M.
Normal market session: 9:15 A.M. to 3:30 P.M.
Post-market closing session: 3:40 P.M. to 4:00 P.M. (for all close price-related activities)
Learning how the market’s activity changes will show traders the times they should sleep on trades.
Market Behavior By Time Slot:
1. Opening volatility (from 9:15 AM to 9:45 AM)
Often, for the first thirty minutes to an hour, the market shows variability in price. This is simply because of all the developments overnight in the world, the daily news from home, and announcements by different companies that influence price trends at the opening. Also, the orders entered through a trading account at this time might change in a second due to wild price jumps. Some may be executed at levels seen differently in expectation.
2. Midmorning consolidation (9:45 A.M. – 11:30 A.M.)
Generally, after an initial wild session, the markets stabilize while traders digest the morning’s first moves and evaluate if further trends in the market are continuing. Activity in trading tends to become somewhat choppy in this period, and a systematic trader opening trading accounts would be watching this time for patterns and confirmations of trends.
3. Pre-Launch Activity (11:30 AM to 1:30 PM)
Midday sessions tend to be volatile and volume-balanced depending on economic data releases during the day. Along with value, updates from companies and information coming from sectors reflect changes in value during this time. Many traders using one trading account for intraday trades review their positions, make adjustments to their marks, and adjust their peddlers during this period in line with half-day trends.
4. Closing Volatility (2:30 PM to 3:30 PM)
The market generally sees increased trading volumes and price movements in the last hour. Such trading activity is often due to the adjustments made by various players before the closing of the market. Bulk buying is usually done by index funds and mutual funds, as well as by institutional investors, during this hour. Traders having active trading account positions should move carefully through this session of trading, as prices highly fluctuate.
Important Factors to Consider Before Executing Trades:
Scheduled market news and announcements: It is better to go through the scheduled data releases or results of particular companies to offset risk before placing a trade.
Expectation of volatility: Some would just want to stay clear of the trades during extremely volatile opening and closing hours unless it is aligned with a specific strategy.
Choosing an order type: Limit orders instead of market orders during volatile periods will give price control.
Conclusion
After opening a trading account, it is wise to learn the various time segments of a trading day and typical market behavior within these windows to place informed trades. Each investor may typically prefer trading styles, which may not be similar to the immediate needs of every investor. Nevertheless, knowing price patterns, market volume, and volatility at various times of day supports the efficient use of a trading account in different market activities.
