When is the Best Time to Buy and Sell in the Stock Market?

I recently got asked this question by one of our Freedom Trader Blueprint students;

Is there a particular time you should place your trade or investment during the day?

The simple answer is yes there is.

The best time that I have found over the years whether for investing or trading, is generally towards the last 10-15 minutes of the market, and if you can, even the last 1-2 minutes right before the market closes.

Why is this?

A few reasons…

  1. Market liquidity which is the volume of buys and sell, you’ll find that the last 10-15 minutes of the market being open is when buyers and sellers (especially institutions) are most active with taking or closing off positions
  2. These buyers and sellers include many day traders and institutions who don’t want to take on board overnight risk and want to make sure they close off their books for the day.
  3. For the two above reasons, you get as close as possible to the true price of where the market wants the stock to be.

The other best time is generally after the first 30-60 minutes of the market open, to allow the market to settle down abit especially if there has been a major market-related development. This period also has quite a fair bit of liquidity.

On a further note, the best time to avoid is usually during lunchtime, because that is when there is the lowest volume of stocks to trade changing hands and hence you may not get the true and fair price you want.

So just to quickly summarise:

If you’re looking for the best time to either buy or sell a stock during the trading day it is;

  • During the last 10-15 minutes before market close
  • Or about an hour after the market opens

And lastly to avoid the lunchtimes as it’s generally the quietest time of the market day of you want to get the best price possible for either the buy or the sale.

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