So, let's talk about after-hours
trading.
What is after hours trading?
Should you do it?
And do you need it?
You see, people think that they need
to trade after-hours because
they don't have the time to trade
throughout the day.
And that is dead wrong.
But first, let's talk about
what after hours trading is.
So, first of all, the exchanges
are open from 9:30
in the morning, and this Eastern
Time, New York Time, from
9:30 - 4:00 o'clock.
This is when most of the trading
takes place.
But then, after the exchanges
close, there is some other
trading going on and this is by
electronic exchanges, right?
So, you can place orders,
and they will be executed if
you specify that you do
want to trade during after-hours.
So, what are the pros and cons of
trading after hours?
Should you do this?
First of all, let me address
a myth. In order to trade,
the markets do not
have to be open.
In fact, my favorite way
to trade is to
analyze the stocks while
the markets are closed
and then place an order.
When you place an order, and you
don't specify that you want
to trade after hours, here's
what will happen.
If I place an order right
now as the exchanges are closed,
it will be executed
tomorrow after the exchanges
open.
So, that's the cool thing, and
this is what you need to understand:
in order to trade,
the markets do not have
to be open.
Whether you place an entry order
or exit orders, like
a stop loss and profit target,
you can do it in the
evening.
So, why do
after hours exist?
Well, because trading is
addictive.
So, there's two main reasons
why after our trading exist.
First, for the trading
junkies.
There are really some people
who after dinner sit
down in front of the computer
and they try to trade
overnight.
Now, here's the challenge.
Overnight, there's not many
participants.
Again, most participants are trading
between 9:30am eastern time
and 4:00pm in the afternoon, eastern
time. So, during the night,
there's not much going on, but
some people think, "Well, I'll just
trade after dinner."
It doesn't work this way.
I mean, really, stay
away from this.
What is another reason why
there are after hours?
Well, as you know, sometimes
companies report
earnings after hours, right?
So, if you have big companies like
Netflix, or Apple, or Facebook
reporting earnings, what they called
"after the bell", this is when
markets can be whipsawed around.
So, this is where large
institutional traders sometimes
try to take advantage of these
moves. Now, this is
where you're trying to swim with the
sharks, and trust me, most
people who try to swim with the
sharks are being eaten
alive by the sharks.
Don't do this, right?
I mean, based on my
experience, trading after
hours is extremely
dangerous.
It is very illiquid.
And it will be very
frustrating for you.
Just stick to the regular times, and
the cool thing is, if you
don't specify with your broker
specifically
when you place the order that you
want to trade these ETH
(extended trading
hours). This was what ETH stands
for. If you do not specify,
it
means that your order is being held
until the exchanges are
open again.
And then you place it.
Now, about earnings.
The way how I personally like to
trade stocks, I stay away from
earnings.
I pick stocks that are not
reacting to earnings.
And in order to do this is, whenever
I find a stock that I want
to trade, I first look for gaps.
When I see gaps on the chart,
I'm staying away from this stock
because what do gaps mean?
It means that right now
this stock is very
receptive to either earnings
or any other news.
By the way, if you would like to
know how I personally trade
go to mytradingroutine.com.
This is where I have a quick video
for you that shows you exactly
what I'm looking for before
I decide to trade
a stock.
And again, there's several criteria.
One, I want to see
that three indicators
are pointing in the right direction.
Either up, in this case
I want to buy a stock, or down,
then I want to sell a stock, and
I have then two other criteria
and one is trendability, and
the other one is gappiness.
And if you want to learn more about
this, go to mytradingroutine.com.
Find out more and this is where
you'll also see the software that
I'm using, and if you would like
to have a demo of the software, you
can press the button right
underneath. And then Rachel or Paul
will get back to you.
Anyhow. So, going back
to after
hours. After hours,
for most people, they're not...
they're not good. Okay.
So, in summary, stay away from
this. I personally have tried
to trade after hours,
it has been really frustrating.
It's very illiquid and this is
not the way to make money.
Trade when everybody else is trading
and you do not need
to be in front of the computers
when the market is open.
But now you know what after hours
are.
This is the trading that is
happening after the exchange is
closed.
But you don't need this at all.
So, was this helpful?
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The more people will start trading
and see that it is
possible to make money with trading.
I'll talk to you very soon.
Okay. Have a great rest of your day.
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