Intraday Timing: Best Time to Trade

For intraday trading, timing is one thing of prime importance. Volatility happens to be the hallmark of stock markets, and the knowledge of exactly when to trade will take your potential for success up to a massive level. Here, we have in store for you some insights into the best intraday timing and the most opportune times to strike your trades.

The Critical Phases in Intraday Trading

Generally, the stock market has three phases during a day of trading, namely: opening hours, middle period, and closing hours. They have distinguishing characteristics that should form the basis for how a trader will chart their strategy for trading.

1. Opening Hours (9:15 AM - 10:30 AM)

Usually, the most unstable hour of the day is the first hour after reaction to overnight news or reports, including economic or global market activities. This is the time when the highest volumes of trading are accounted for and there is a likelihood of wild fluctuation in prices. Skilled traders have learned to take advantage of this volatility hour, but it becomes pretty nerve-wracking for the novice who may suffer shocks in form of unexpected losses due to instant changes in price.

Best Strategies: Because of this, market speculators tend to trade on fast scalping techniques or major trend plays. Some intraday traders with a higher risk tolerance will be able to go in and then get out at the same time.

2. Midday Session (11:00 AM - 2:00 PM)

By the nature of things, the middle part of the trading day is relatively more silent with volatility when decreased. This is the time of stabilization for the market, with price movements being relatively less chaotic. It would therefore be an appropriate time for traders with relatively low-risk profiles as well as those in need of more predictable market behavior.

Best Strategy: In general, middle day trading will be more appropriate to trend-following strategies or breakout strategies whereby you can capitalise on a price trend with minimal risks. Given the fact that the market is rather low on volatility, this time allows for clear analytical decision-making.

3. Closing Hours (2:30 PM - 3:30 PM)

This is always an hour of trade pick-up since people close out their positions for the day. The market also remains vulnerable to another change in wave, similar to what was seen in the opening hours. Prices are always fast-changing at this time, and this is just another window that could bring short-term traders close to some very valuable opportunities.

Best Strategy: When one may miss the opportunities in the morning session, he will get a golden opportunity in the closing session to catch the late-day trends or price reversal. Just like in the opening session, the trader needs to be very vigilant as the market can turn very fast.

Ideal Time for Intraday Trading

Although the market is available from 9:15 AM to 3:30 PM in India, intra-day timing significantly influences the maximization of profits. Using market data and trends, most profitable intraday trades normally take place within the first hour after the market's opening period and the last hour before closing. At these hours, liquidity and volatility are at their highest, making a probability for quick trades.

That, however, is going to depend on your risk appetite. While highly experienced traders thrive in the frenetic activity of the opening and closing hours, a risk-averse trader would do better in the middle period of the trading day where stability rules permit slower, more deliberate decisions.

Preparation for Intraday Trading: How to Open a Demat Account

Open a Demat account before you start intraday trading. This account will carry shares in electronic format enabling buying and selling to take place instantly during the market hours. 

Free trading accounts are also offered by some of the other brokers in which an account-opening charge is waived to encourage new traders. Make sure you have documents required for demat account required with you.

Conclusion

One important aspect of intraday trading is also timing. The hours of opening and closing in the market are always a time of high volatility, which can be good news for short-term traders hoping to make a quick buck. For the risk-averse trader, the quieter hours in the middle can offer a better opportunity. Whichever way the trader chooses to do intraday trading, knowledge of intraday timing is an essential part of success in the stock market.