Apparently there is some new data out indicating it is not a wise to invest your money in a stock at the opening bell. This report out yesterday in the Wall Street Journal. As it requires a subscription, which I do not have, maybe someone here on this forum can fill us in on why? Here is the opening part of the article: I would post a link, but I am fairly new to this forum. I spend a lot of time reading here, but not too many posts, so unable to post links, yet. But I would imagine, this is fairly simple to find this link.
Depends on how you trade. If you just put a ´ buy 100 shares of X´ order in, then you certainly run the risk of the price changing, and somewhat drastically from the price you last saw on your screen before you placed your order. It also applies to your brokerage and how they process your order. The open is always very active, I never put an open order in during the first hour. Name the price you are willing to buy or sell at.
When I'm buying a stock with the intention of holding on to it for at least a while as an investment, I usually wait a while after the bell to buy once things have calmed down. Mid-day is often a good time to buy. If it's a quick trade, I'll typically do the transaction at what appears to be the first prudent opportunity - which may be very early or late, or at any other time during trading hours, and often as soon as I get my hands on a particular piece of info that compels me to make the trade.
Assuming there is no significant news moving the market (see http://www.bullmarketboard.com/threads/5967-How-do-you-follow-the-latest-news-on-the-markets for ideas) or the stock and all else being equal, I find a good time to sell is within the first 60-90 minutes of the open when the volume is high. The opportunity to buy seems to be best about 1-2 hours after European markets close and volume is lower. Prices again seem to rise in the last half-hour of trading; I assume the increased volume is due to day traders closing out positions. Regardless of when I enter a buy or sell, I'll still use limit orders. I can't offer any statistical proof supporting my statements above, just my observations over years. Contagion of world markets, sector moves (think: commodities), earning reports, central bank news, et al, changes the story. Additionally, a blurb by CNBC (and to a lesser extent Bloomberg and Fox Business) peeps often causes a stock's aberrant move. Again, I use limit orders... and I don't chase price moves. Note that I don't day trade. I use the observations above when I decide to do something with a holding or a stock on a watchlist. HTH. YOUR MILEAGE MAY VARY.
I wouldn't start trading as soon as the bell goes either to be honest. Even if you have your mind set on a stock your going to buy, I'd still wait a little into the morning just in case there's any massive fluctuations you didn't anticipate.
Thanks for all of your replies, as I appreciate all of your insight into why or why not it is a good idea to trade stocks in the morning. I would imagine that personal observation over the years provides more information compared to data that might be slanted for a good news story article to sway public opinion is quite relevant, thus I will take this into consideration. Also, thanks for the link in this bull market forum listing news sources that offer a good way to follow the stock market. I am not that knowledgeable about price limits vs price moves. I suppose that is an area I must understand more. Thus, a topic for another thread.
You are welcome, Walta. Whereas a market order executes immediately at the best available price, a limit order sets the price and a time period for execution. Limit order: http://www.investopedia.com/terms/l/limitorder.asp Market order: http://www.investopedia.com/terms/m/marketorder.asp There is no additional cost to use limit orders. I just use them to perhaps save a bit of money buying on dips in the sagging afternoon market. HTH. YMMV.
Re selling, I often do like to take profits early when a stock opens up significantly higher than it closed the previous day after I've been long the stock overnight or for days or weeks or longer. Stocks often sell off after the open, which of course is a good reason to wait a while before buying.
