However, with the introduction of after hours trading, traders could transact throughout the day. There is no doubt that it is beneficial, but not without loopholes. Hence, one must be careful while trading after hours in the stock market.
Do research on the stocks that you would like to deal in. Calculate the number of shares you will buy and the price of the shares. In after hours stock trading, you have to specify the money you will invest in buying stocks. A majority of such markets accept limited orders. Place your trade after you have established the price for a particular stock through the ECN or the Electronic Communication Network. Every brokerage firm has access to the after hours trade market through ECN. Now, you have to wait for your order to be accepted. Many a times orders go unfulfilled due to a lack of the kind of stocks requested by the trader. If the order was accepted, then you’ll receive a notification receipt stating that your trade was successful.
Initially individuals who were high-net worthy and institutional players were only allowed to access the after hours trading. However, with the advent of the ECN the scenario changed and even regular individuals could access this particular stock market. After hours stock investment can be done from 4 pm to 8pm that is after the normal market closes. NYSE allows it till 8 pm while NASDAQ allows till 6:30pm only. After hours trading could be profitable only if you decide to learn trading and follow certain trading tips.
Stock market is affected heavily by the world financial news. Therefore, you must keep yourself updated on that front. Your objective will be cash in on the quarterly results released by big companies after trading hours. You must have a news source that is reliable so that you can make the right moves during the release. You should gain from the price moves. Have your earning and financial calendar ready with you before you jump in. You have to be ahead of time and form a plan according to an analyst’s prediction and your intuition and study.
Nevertheless, you have to be swift while trading after hours. You must remember that these are for short term gains and hence you have to make swift moves and not hold stocks overnight. Have a feasible exit plan ready before getting into after hours stock trading.
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