You may want to consider day trading stocks after hours if you are searching for how to day trade outside the traditional 9:30 am to 4 pm window. After-hours trading can be a great way to make money and avoid the market volatility that often occurs during the day. This article will discuss the benefits if you decide to day trade after hours so that you can determine if this is the right approach for you!
The US stock market is open from 9:30 am to 4 pm EST. Day trading during these hours may not be convenient for some traders due to working a 9-5 job or other obligations. Beginning traders may not be aware that many exchanges offer extended trading hours. These extended hours will enable you to trade during all additional market hours. This can gain a significant advantage in finding trades and making money.
Most major brokerage firms (like TD Ameritrade, Fidelity, Schwab) offer extended hours trading.
Day Trade After Hours: Trading Advantages
#1 – Convenience
One of the most significant benefits of day trading after hours is that you can trade when it is most convenient. If you have a full-time job, you may not be able to day trade during regular market hours. However, post market trading allows you to trade in the evening (post market), overnight, or early morning (pre market). This can be what you need to fit day trading into your busy schedule.
#2 – Capitalize on News
Another benefit of day trading stocks after hours is that you can take advantage of news that comes out after the market closes. If a big announcement or piece of news comes out after the market closes, you can capitalize on it by day trading after hours. Trading news can be a great way to make money if you can act quickly and efficiently. This also includes taking advantage of global news. For example, if a significant event occurs in Europe or Asia during the day, you can trade on it after the markets have closed in those regions. This edge can give you a significant advantage over other day traders limited to the US market.
#3 – Early Market Entry
Another advantage of after-hours trading is that you can get a jump in early for the next day. Often, the markets will move based on what happens overnight. By day trading after hours, you can get in on these moves before they occur during the day. This additional edge can give you a significant advantage in making money over other market players.
#4 – Manage Risk
Finally, day trading stocks after hours can often be less risky than day trading during regular market hours. This is because there is often less volatility after the market closes due to various factors, like fewer market participants. You can avoid this volatility by day trading after hours and find more predictable patterns. This can help you avoid some losses during the day when the market is more volatile.
Where to Day Trade After Hours
Now that we have considered the benefits of after-hours trading. Let’s review some of the markets that are available for trading after hours.
1. Stock Market (New York Stock Exchange & NASDAQ)
The stock market is the common market that allows day trading after hours. The New York Stock Exchange (NYSE) and NASDAQ have extended trading hours. This will enable most stocks and index equities that are a member of that exchange to be traded after the market opens. However, please note that OTC penny stocks (Over-the-Counter stocks) are not available to be traded after hours. Stock options are only available for trading during normal trading hours.
Note: To trade after hours on thinkOrSwim, configure the time in force (TIF) in your order to either EXT (Extended Hours Trading) or GTC_EXT (Good to Cancel Extended Hours Trading). This setting will enable the order to execute during the after-hours trading session.
2. Forex Market
Another market that allows after-hours day trading is the forex market. Compared to the well-known US stock market, the forex currency market never closes and is available 24 hours daily from Sunday evening to Friday afternoon (5 days a week). This makes it an ideal market for day traders who want to trade after hours. The forex market enables the global trading of currencies (like the US Dollar or Japanese Yen). This market supports foreign exchange rates for every major currency in the world. It is by far one of the largest markets in the world in terms of volume traded.
3. Futures Market
The futures commodity market is another market that day traders can take advantage of after hours. The Chicago Mercantile Exchange (CME) offers extended trading hours on some of its products. For example, trading in the E-mini Dow Futures contracts is available from Sunday-Friday, 6 pm to 5 pm EST. The market is a marketplace where futures contracts are traded. A futures contract is an agreement to buy or sell a commodity (like gold, oil, wheat, corn) at a certain price on a future date. Most futures traders are speculators who are betting on the direction of prices. Speculators do not need the commodity, but they trade futures contracts in an attempt to make a profit.
4. Cryptocurrency Market
The cryptocurrency market is the last market that day traders can trade in after-hours. The cryptocurrency market never closes because it is a decentralized market. This means that day traders can trade cryptocurrencies 24/ seven and are not regulated by any government or financial institution. The market is volatile, with prices fluctuating rapidly. Cryptocurrencies are often traded against other cryptocurrencies or fiat currencies, such as the US dollar.
Whichever market you choose to trade with, you must understand how it works and what you’re getting yourself into.
Summary: Day Trade After Hours
If you are interested in day trading outside your full-time job, then day trading stocks after hours may be the perfect solution for you! After-hours trading offers many benefits that can help you succeed as a day trader.
If you are considering day trading stocks after hours, carefully weigh the pros and cons. This can be a great way to make money, but it is not suitable for everyone. Consider your schedule, risk tolerance, and goals before making a decision.
Maurice Kenny has helped over 600 people become financially free through one-on-one coaching, mentorship, and options trading strategy. Many of these new traders are now full-time traders, and they all started by watching his 1-hr webinar.
Feel free to check out other FREE educational resources to help guide you as you begin your new journey to financial freedom.
Also, download a (FREE E-BOOK) by Maurice Kenny, “DAY TRADE LIKE A MILLIONAIRE.”