Preparation before the market opens will affect your performance throughout the trading day. This is an urgent task, because the financial market is fiercely competitive, and the strategy needs to be constantly adjusted according to short-term conditions. This is especially true in the modern environment of the 24-hour cycle of securities trading. Many traders still turn on the screen before the market opens, hoping to catch up with the progress. Extra sleep may be beneficial, but the competition is to get up early, collect data, and decide how overnight transactions will affect the flow of transactions.
Immediately choose to join the ranks of these conscientious people, get rid of the deep sleep and follow the comprehensive pre-marketing checklist below:
- To stay ahead of the competition, or at least keep up, implement consistent and effective pre-marketing procedures.
- Checking market index futures, considering economic and geopolitical factors, seasonality, and screening the torrent of corporate news are all good preparation strategies.
- Consider the technical factors at play by identifying and recording key levels, establishing first deviations, finding safe exits from positions, and placing deep limit orders.
- Look at what other traders are doing, what themes and trends are at work, but avoid the crowd, think irrationally, and decide before the meeting how passive or active you want to be during the meeting.
- After the trading session begins, be smart: buy on dips and sell on dips.
Check index futures
Look at the highs and lows of the S&P 500, Nasdaq 100 and Russell 2000 index futures during overnight trading hours, as they will create support and resistance during US market trading hours.
Macro power review
Read the stories that have impacted global markets overnight, and consider how they will affect the US time. These are usually market-specific, the central bank or economic data will move the tape. However, geopolitics and nature will produce their own market movers from time to time, so please stay informed.
Filter the news flood
Check out news about open positions. Upgrades, downgrades and coaching can translate into huge losses or windfall profits. Scan the financial headlines to learn about other stories that will drive the tape and discover new opportunities for the conference.
See what other traders are doing
Sort pre-IPO securities by number and find out where your competitors are risking.Then look at the open positions, and The taste of the day, For example, stocks that report earnings or commodities that respond to geopolitical events.
Write down the key level
Internalize the key figures of the main instruments and open positions, if necessary, put the data in front of your nose, and you can see it during regular meetings.
Determine the pre-market level
Pay attention to the position of index futures or underlying funds in pre-market trading, especially after monthly economic data. These levels may produce breakthroughs or collapses in regular meetings.
Look for a safe exit
Exit a losing position before the market, especially when you expect to be hit after the market opens. Many traders and investors do not have access to real-time quotes until 90 minutes before the opening of the US market. You will be amazed at the frequency of favorable exits from third-party exchanges before this.
Build first bias
Check the relationship between the last closed printing and the expected start of printing. Determine who will benefit and who will be trapped. If you are not on the side of victory, now is the time to fight.
Consider the day of the week, the time of the month, the month of the quarter, and the time period of the year. Each market segment produces specific price behaviors that favor one market group rather than another.
Most securities will not offer any opportunities on that market day. Finding the needle in a haystack by tracking short-term money flows is your job.
The red or green flashes you see before the market are not more important than how they change current expectations. If you can’t solve it yourself, please find an expert you trust to explain to you.
Lower depth limit order
Play this game when you are sitting alone in the dark and watching the pre-market market. Place a deep limit order for the securities you want to own, but do not place an order at the current price. Then be surprised at how often you are filled.
Set your collar
Based on your pre-market analysis, decide how aggressive or defensive you want to be in the morning meeting. Reassess at lunchtime or when there is a significant change in short-term circumstances.
Avoid the crowd
Prepare a momentum playlist and do nothing while waiting for other traders to be involved in the wrong side. Then look for cheap entries.
Buy on dips / sell on dips
Securities fluctuated sharply in the pre-market market as algorithms pushed them to extreme prices in an attempt to attract weak hands. Use these declines and declines to position in the opposite direction, or accidentally exit on an open position.
Your pre-market routine lays the foundation for the rest of the trading day. Use this comprehensive list to speed things up, before the opening clock.