PostHeaderIcon Signs Early Trading Can Tell You

shutterstock_173889542Traders try to get as much information as they can to forecast or predict market movement. Although it holds a lot of guesswork, being able to get the right information at the right time can help traders estimate likely outcomes. One way that traders can get information about the market is by looking closely at the activities as the markets open.

The start of the market session can tell a lot on how the movement will trend later on in the day. It can provide traders with a number of clues. When the market closes, the market related activities usually do not stop there. Information and decisions are passed and made by investors, companies and traders. The information from other markets and the decisions made through the night are absorbed and get acted upon during the market open.

Volume of Trades

Trading volumes during market openings are always high compared to intra-day volumes. It is only comparable to closing volume in terms of size and amount. Comparing the opening volume with trading volumes for the rest of the day may not provide any useful information. But if you compare the opening volumes in different days may provide certain clues for insight.

High trading volumes usually mean there are increased volatility and the likely changes in price. High trading volumes can mean different things depending on the size. If the high trading volume is a result of a large number of small orders, then it may indicate a common activity in the market. But if the large volume is a result of a few large orders being made, there are some institutional activities occurring. Either companies or other big investors are unloading large volumes of a particular security or trying to buy up large orders of a particular security. This may likely lead to trending at a certain direction.

Pre-Market Activities

While the market in one country closes for the evening, another one opens for the day. Pre-market activities in international markets can also provide some important insight of movements by the time the market opens. Some global markets may show heave trading of a particular stock and that the news received have led to indexes and stock prices moving away from the previous close. These activities in international markets may provide the trader with insight on what might likely happen when the market opens.


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