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