Dan Passarelli, CEO - Market Taker Mentoring

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A lot of traders, as soon as the bell rings and the markets open, they start trading. And for some people that can be a great idea, but for others, it might not.

Let's talk about when is a good time to trade certain things and when is not, especially based on your level of experience.

During the open and the close, a lot of weird things can happen. You just kind of see some prices that maybe you don't expect something to trade at. You could get a sort of a random fill at a higher price or a lower price than you expect, and there's a lot more seemingly randomness to it. Sometimes a more experienced person can kind of figure that out and use some of that to their advantage. But I think newer folks are better served to just sort of wait until the market quiets down, wait about 15 to 30 minutes until after the market opens, and then place it in the typically less volatile time of the day.

Now, the same goes for the close. This is typically the last ten minutes of the day. And one of the special things about the close is that the bid ask spreads; here, if you look at Johnson and Johnson (I'm shooting this one evening after the markets closed) you see that the market is really kind of widened out a fair amount. If we were looking at Johnson and Johnson during the day, we would see some tighter markets than this. It just makes it harder to trade and harder to get filled.

You could leave a resting order in the middle of the market, and if you just leave it into the close, you might get filled and you might not. And one thing traders don't like is randomness. Even though that's the thing we deal with every single day, we like to be able to control the things we can control and try and profit from the sea of randomness that is the market. So experienced folks go for it all day. Opens and closes are great. Beginner traders: Definitely better to stick towards the middle of the day, wait 15 to 30 minutes, and skip the last ten minutes, and I hope that helps.