Wondering when is power hour stocks? Well, the first one is from 9:30 AM EST to 10:30 AM EST. The second power hour (which is slightly more than an hour) is from 2:45 PM EST to 4:00 PM EST.
The power hour does not correlate with profitability. It is merely a timeframe during which the trading activity peaks internationally. Thus, the power hour is tied to the trade volume, not profitability.
But since the trading community is most active during these early morning and afternoon sessions, it makes sense to dive into the game during these power hours for stocks. Let’s take a look at what the power hour is all about and why it matters for traders!
Why is Power Hour Important for Traders?
Again, the power hour is not about how much you can profit from your trade. It is instead related to trading volume. Now that you know what time is power hour in stocks, let’s take a look at why this timeframe matters for traders.
During power hours for stocks, the trading volume and liquidity are at a peak. This allows scalpers, swing traders, and day traders to execute their trades and maximize their gains. The profitability can spike if you pick your trades smartly and exit when you must.
The power hour is thus the optimal timeframe for day trading, swing trading, and scalping.
When Does Power Hour Occur in the Stock Market?
If you’re wondering “When is power hour in stock market in the morning,” the answer is 9:30 AM EST to 10:30 AM EST. But there is another power hour by the close of the trading day, i.e., from 2:45 PM EST to 4:00 PM EST.
What does this mean though?
While trading apps let you use their services all the time, the U.S. stock market opens at 9:30 AM EST and closes at 4:00 PM EST. As soon as the stock market opens in the morning, the first stocks power hour starts.
When the day dawns on the U.S. stock market, traders rush to enter trades based on the news from the previous night and all fresh pre-trade updates for the day. After this trading bout that lasts an hour, traders diffuse once again.
The second spike in trading volume takes place almost an hour before closing time at the U.S. stock market. This is when institutional traders want to make their last trades for the day, thus spiking the liquidity and the trade volume once again.
This means that the opening and closing times for the U.S. stock market are the busiest for traders and are thus considered “power hours” for stock trading.
Hopefully, this answers the question “When is power hour in stocks?”
Strategies for Trading During Power Hour
Scalping, swing trading, and day trading are the go-to strategies for maximizing profits during the stock power hour. In all of these cases, traders benefit from short to medium-term fluctuations in the price of their selected stocks and securities.
All three techniques operate on very similar premises, but they do have key distinctions. Scalping involves very short-term trade patterns, usually within 5, 10, or 15-minute timeframes.
Your goal is to execute as many buy-sell or sell-buy trades as you can within this period, accruing small but consistent profits with each trade.
For swing trading, the interval is bigger which means that you’ll have to hold on to your stocks for a while. Swing traders meticulously research their stocks before investing their time and money in something to score consistent profits.
Again, the goal is to benefit from short-term “swings” or fluctuations in the prices of stocks.
The best timeframe for swing trading is the second power hour, i.e., closing time.
Day traders too, execute their trades within the day, and again, the difference is only the timeframe. In this case, the trader may exit their position in an hour or even in 4 hours — the only hard rule is that the trade must be concluded within the day, thus the name.
Stock Power Hour: Tips and Tricks for Success
Again, we must emphasize that no matter when you decide to get into a trade, profitability is determined by the decisions you make. While the probability of scoring big is higher during the stock power hour, there are no guarantees in the world of trading.
However, you can do much to ensure consistent profits and decent gains for your trades, such as:
- Never rush to make a trade/investment
- Be patient and try to make informed and calculated decisions
- Always keep the P/E (price-to-earnings) ratios for your selected stocks
- Keep an eye out for the option contracts
- Look for high-growth industries and invest in them
- If you’re losing a trade, exit immediately
- Exit a trade if you’re profiting
- Don’t wait around until it turns into a losing trade
- Have realistic goals for the day
- Don’t feel pressured to trade as much as you can during the power hour
Maximizing Your Power Hour Profits: Common Mistakes
Knowing when is power hour in the stock market and executing profitable trades during this peak time is what drives most day traders, scalpers, and swing traders. Just steer clear of all the common mistakes that newbies can make during the stock power hour.
Avoid rushing into trades, never ignore the P/E ratios, don’t throw your money into stocks of low-growth companies, and don’t turn your wins into losses. Use the data at your disposal, making informed trade decisions for maximum profits.
Learn from other traders’ mistakes. There is a ton of resource material online that you can review to gain valuable insights. Learn from the pros, especially their mistakes, and avoid those pitfalls yourself.
Power hour or otherwise, strategize your trades smartly, create realistic profit expectations, and avoid impulsive decisions.
Do this and you’ll be golden!