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First Hour Trading – Power Trading Technique for Consistent Profits

Let's get more granular when we say the first hour

First Hour Trading – Power Trading Technique for Consistent Profits

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Why First Hour Trading ?

My trading methodology requires you to execute real-time equity orders during the first market hour. During this period you have to be riveted to your station, focused on each entry and exit. You cannot take a break for a bowl of cereal and come back munching to see how your trade is doing. All your trades must be done in real-time, buy and sell (long and short positions). During this hour you will place ONE to TWO round-trip trades and this must be with one or Two stock only.

Do not expect quick success. In any trading system, it takes time and hands-on experience to gain consistent profits. My system works, but learning it takes dedication.

Let’s get more granular when we say the first hour

The first 15 minutes

9:15 – 9:30

First 15 minutes is for My stock Analysis to find the potential Trade Setup for the Day. Once the stock is Identified base on Technical Parameter than the psychological aspect of trading is extremely important. Run through you criteria check points once again before entering the trade.

9:45 – 10.30 

These is the time when you should get in to the trades to make the most out of the 1 hour of trading, I use limit orders to take the trades though you can take market orders as well. Once you have place the orders in the system, now its the time to relax and let the money work for you as you.

Whats Happens Next 

After you have entered a trade is now its only a Probability Game. Its your system  successfully back tested. Is it  working on 1 : 1:5  ratio , with a accuracy of 50 % ? I have my trading system doing the job for me. it  will book profit if target is achieved or exit if stop loss is triggered and in the event when both the outcome does not occur then it will Square of at 3.20 market rate.

Why 11:00 am is a bad time

Most of you reading this article will say to yourselves, this makes sense.  I should trade during the first hour when I have the greatest opportunity to make a profit since there are the greatest number of participants trading.  Since I am a trader I know there are still a hardcore group of you reading this thinking, I can make money all day.  This is actually a true statement.  You can make money all day.  The only problem is the vast majority of people do not.  You will see that around 11:00 am the volume just dries up in the market.  This is because the institutional investors and hedge funds realize that there is far more work and risk to be had during the middle of the day than potential profits.  The resulting price action when the true stock operators are away from their desk is basically a lot of sideways action.  Stocks will breakout only to quickly rollover.  Stocks will begin to move in one direction with nominal volume for no apparent reason. Lastly, while there may be price movements, they are so small that after commissions and time spent fighting the market it’s just not worth the headache.  Oh how I wish I had come across an article like this back in the summer of 2007, I may actually still have a few strands of hair on my head.

Just Settle Down

Think about it, in any line of work you want to follow the methods and strategies of the people who are the most successful.  Don’t try to fight the market just for the sake of being able to tell your family members and friends you were trading all day.  You are in the business of making money, not working long hours.  If you think my experience isn’t enough reason to caution you, Thomson Reuters did a study and have concluded that 58% of all volume on the NSE occurs during the first and last hour of trading.  Of course the bulk of that trading is in the first hour.  So, while one hour may only make up ~15% of the trading day, it is probably accounting for 35 to 40 percent of all the trades on average.  Again I will ask you, why would you want to trade during any other time of day than the first hour.  If I can not sway you from your desire to be involved in the action of the market, then maybe at least take a break between the hours of 11 am and 2 pm.  While the afternoon does not have as much volume as the first hour trading, you can still catch some good price swings.  Funny as I right this it makes me think of trading in terms of surfing.  All we are trying to do on any given day is catch some really good waves.

Hopefully you have found this article useful and it has provided some additional insight into first hour trading and some basic approaches you can take in your INTRADAY TRADING STRATEGY  to capitalize on the increased volume in the morning session.  Please now take a minute and visit our site Profitous.in  and check out how you can use our trading STRATEGY to help you become a better trader.

 

 

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