The most straightforward way to do this is to take your trades and place a Stop Loss and Target. After you reach your target or stop loss don't take any further trades. You'll know when the stop loss or target price is attained just like any other moment. However, if the stop loss you have set is very tight, it may be beneficial to avoid holding the position open. The sudden surge in volatility could cause an overly tight stop.
Pre-market release a wealth of economic information and data associated with the futures contract. It's recommended for all to look up the economic calendar each day.
Some traders believe that you should end any pre-market positions before the opening however, some don't see any justification. Here are some options.
Some traders are insistent on closing all position that is in the market prior to the opening however, others do not agree. In this situation, there are several alternatives.
You need to be vigilant during the pre-market for any news releases. There are typically more releases of data in the pre-market market than during normal trading hours. Additionally, these data release can affect prices as compared to if they were released during normal trading times. It is also because of the lower trading volume in the premarket.
Many futures contracts are traded round all hours of the day. The number of contracts traded grows when major markets such as New York, London and other capitals of Europe open. This is due to institutions and traders in the same time zone or in the vicinity begin trading.
Although strategies for trading can differ based on situation, it is common to discover one or more great trading possibilities within one hour after the opening. It's possible that you'll find trading in the pre-market worthwhile if your activity is restricted to the hours that are prior to the market opens.
A simple one is to look at your trades and set the trades with a stop loss and an objective. Then, don't do anything until either your stop loss or the target has been achieved. As it does every other time, when the price reaches the target or stop loss, you can do nothing. If you have a very tight stop-loss on a position you don't want to be open. An instant surge of volatility can easily result in an extremely close stop loss.
A variety of economic data, including data that is related to futures contracts are accessible in the pre-market. It's a good habit for everyone to keep an eye on the economic calendar every day.
Day traders need the same thing: trading volume and price fluctuations. This is usually the case at the time of opening. For instance, consider the E-mini S&P 500 (ES); the stock market opens officially at 9:00 a.m. Eastern time, and the E-mini is a part of the Standard 500 Index of Standard & Poor's. The volume of trading on the E-mini tends to escalate within an hour prior to the open. Volume and volatility rise dramatically at around 9:15. This trend continues for several hours.
This means that you should not rely on the premarket direction to determine the direction for the remainder. Instead, stick to trading shorter-term trends as they unfold and avoid getting distracted. Do not try to determine the impact of the Pre-Market on the rest of your portfolio.
You should always be able to get yourself out of any position at least a minute prior to major release of data. Also, you should avoid taking on new positions within five minutes of major data releases. This will prevent price gaps that result from data releases. Price gaps are areas of pricing in which no stocks have traded hands. They make it difficult to manage risk. Once you've got the data it is possible to monitor for trade setups that are valid.
While the pre-market could provide some indication of how the day will unfold, it often isn't that reliable. If the futures market is falling in the pre-market, traders may be pessimistic going into open trading. Futures may increase in response to the new trend as trading gets underway. If the futures are rising heading into open trading it is possible that they will continue to rally after open.
It is important to be attentive in the pre-market hours and keep an eye out for announcements. The news releases can have a greater effect on prices than regular trading hours. This is due to the lower pre-market trading volume.
You ought to consider experimenting with each method and discover what works best for your strategy. Make a note of your profits from pre-market trades prior to exiting the market and how long you keep those trades open until you exit. In the course of a few months, you'll have a very good indication of whether you should keep market-open trades prior to the opening with your strategies.
Many economic data (and data related to futures contracts) are released during the pre-market. It's recommended for all to look up the economy calendar each day.
Be sure to get out of all positions no later than one minute prior to major data release. Then, don't take any new positions beginning five minutes prior to a data release. This will help avoid price gaps caused by data releases. Price gaps are areas where stocks aren't changing hands. This can make managing risk a challenge. When the data is in, you will be in a position to begin checking for valid trade settings again.
You might find one or two excellent trading opportunities every hour. However your strategy for trading could be different from others. It's possible that you'll consider trading during the pre-market beneficial if your trading is restricted to hours prior to the opening.
A lot of economic data (and information related to futures contracts) are released in the pre-market. It's a good habit for anyone to check the economic calendar each day.
Some traders recommend that you close all pre-market positions before the market starts, other traders don't believe in this. There are a few options you could take into consideration in this case.