Every day trading advice for better trades
Why I don’t enter stop-loss orders before the stock market opens
In a previous
article
I said I waited to be notified by alerts first before trading.I received this online stock trading advice some time ago, and it is now a very important part of my stock trading strategy.One trading veteran told me that it isn’t good to enter stop-loss orders or a stock trade entry order before the market opens. The saying is that ”amateurs control the open, professionals control close.” It means that a lot of amateur investors place their orders before market opens. Most of these orders are based on some “hot stock pick advice” or some ”hot news” received during pre-market hours. It creates a huge opportunity for market professionals to profit from these orders. It’s very common that such news moves stock prices during pre-market hours already, and stocks open with a gap (the price is much different from yesterday’s close price). It means that stop-loss orders or trade entry stop orders of these amateur investors are often filled in at a totally different price from what they expect. And after the first few minutes of trading, when all these orders are filled, the price returns to the previous day’s close levels. It happens on a daily basis. I’ve seen it a lot of times during my trading career. So, I think that this stock trading advice for online trading is very important.
Stock trading advice for online trading
- Do not enter any orders that are to be filled after market opens before the market opens.
- Wait 5 or 10 or 15 minutes and then enter your orders. Adjust stop-loss levels or trade entry levels accordingly.
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