The first 30 minutes of every trading day are the most dangerous for me. I generally don’t like to trade during this time. I live in the Central Time Zone so for me that’s from 8:30 until 9:00 am. There’s usually a rush of buy and sell orders that have been stacked up all night by part time investors that spent the prior evening doing research.
During the first 30 minutes there’s often a disorderly push and pull among traders due to trade imbalances as trades come tumbling through in a disorderly manner. Usually within 15-20 minutes the markets rebalance and real traders start pushing the market up or down.
Once I begin to feel that the market has found an equilibrium in it order flow I start to look for trend breakouts. These are literally intraday highs or lows and they signal which way the market or an individual stock is probably heading for the day. This literally tells me if I should execute a trade or wait for a better entry.
I have used this strategy more times than I can remember. It’s simply waiting for a trend to form before jumping into one side of a trade or the other. It has saved me over the years from making thousands and thousands of mistakes. Perhaps this little idea can save someone else from jumping in too soon and regretting it.
Good Luck and Good Trading.