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Best Time Slots for Intraday Trading

Jul 8, 2024

Best Time Slots for Intraday Trading

Market Hours Breakdown

  • Equity Markets:
    • Open from 9:00 AM to 4:00 PM
    • Regular Trading Hours: 9:15 AM to 3:30 PM
    • Post Market Hours: 3:40 PM to 4:00 PM

Important Terminology

  • First Half: Refers to the earlier part of the trading day
  • Second Half: Refers to the latter part of the trading day

Time Slots Not Recommended

  1. Pre-Market and Post-Market
    • Lack of liquidity
    • Can only enter trades, not exit
  2. 9:15 AM to 9:30 AM (First 15 Minutes)
    • High volatility due to price discovery
    • Increased likelihood of stop-loss being hit
    • Psychological impact of early losses
  3. 3:00 PM to 3:30 PM (Last Half Hour)
    • Most brokers don't allow intraday orders beyond 3:15 PM
    • Limited time for trades to work out
  4. Half Hour Before European Markets Open (12:00 PM - 1:30 PM)
    • Depending on daylight saving
    • Potential negative global sentiment

Recommended Time Slots Based on Strategies

  1. Momentum-Based Strategies
    • Ideal Time Slots: 9:30 AM to 10:30 AM, 1:30 PM to 3:00 PM
    • Morning: Active retail traders create momentum
    • Last Hour: Institutional activity creates momentum
  2. Mean Reversion Strategies
    • Ideal Time Slots: 10:30 AM to 1:30 PM
    • After initial moves, there's potential for reversion to mean
  3. Gap-Based Strategies
    • Ideal Time Slot: 9:15 AM to 9:30 AM
    • Experienced traders only
    • Enhanced volatility requires smaller position sizes
  4. Expiry Day Strategies
    • Days: Wednesday and Thursday (Nifty and Bank Nifty), Tuesday (FiNifty)
    • Ideal Time Slots: 9:30 AM to 1:30 PM (up to 2:30 PM with caution)
    • Avoid trading beyond 2:30 PM due to high volatility
  5. Event-Based Strategies
    • Pre-Event: Avoid trading due to speculation
    • Post-Event: Wait 10-15 minutes before taking a trade
    • Never trade through the event

Other Strategies

  1. Scalping Strategies
    • Broad term with various sub-strategies
    • Momentum-based scalping: 9:30 AM to 10:30 AM, 1:30 PM to 3:00 PM
    • Key levels or mean reversion-based scalping: 10:30 AM to 1:30 PM
  2. Arbitrage Strategies
    • Independent of specific market hours
    • Opportunities appear randomly throughout the day
    • Not recommended for retail traders due to competition from algorithms

Conclusion

  • Many different strategies and time slots discussed
  • Understanding timing is crucial for successful intraday trading