When looking to trade the market, most people dont realize there is a difference in the time of day that definately affects how stocks act. Not using this information makes it harder to make money through any type of trading, short term trading, or even long term trading.

The first 30 minutes is usually the craziest time. Stocks will have bigger swings, up and down as a lot of times there are not established orders from larger mutual and hedge funds in the names to counter this volatility. It is a great time for short term trading of stocks because of the increased volatility, but with that also comes increased risk of a stopout. Also there is not much in terms of support and resistance created yet, but you can look at the last hour of the prior day for guidance there.

From 10am EST until about 11:30-45 EST is prime time for trends to develop. These times are not exact, and shift around some but in general this is when a decent, continuing trend will try to develop. Also the volatility calms down alot, making it easier to put in a stop that is closer to the actual price when short term trading. For longer term investing, usually this is not the time to make a decision on entrance, its too early in the day. The exception would be an entrance based off of daily breakout of resistance or support, or some key fundimental data that is just starting to push the stock. Entry when that happens is ok during this time.

From about 11:30 until 1:15pm EST stuff usually slows down alot, and fake moves can happen. What I mean by fake moves is stuff will look weak, then rally up sharply, or stuff will look strong (like it will continue) and then abruptly sell off. Most of this is just due to decreased volume and liquidity. Program trading bots and algorithm trading bots love this period of time. Basically they try to fade every move. Stuff will generally pick after 1:15 for about 45 min or so, then slow down again near 2pm EST. 2:30PM EST (for whatever reason) is a key time to watch. Countless times the market will put in a top or bottom near this time and then reverse into the close. Does it happen all the time? no. But it does happen enough of the time its well worth paying attention to. Volume should pick up after about 3-315EST into the close, whether there is a 2:30 reversal or not. This is again a good time for short term trading, AND its good for watching for longer term additions as you can see if the stock is holding gains, pushed above key resistance, has made a major reversal on daily chart etc.