How To Develop an Effective Pre-Market Routine
Developing Your Pre-Market Routine
Once you have developed a trading plan that you are comfortable with, you will need to move onto developing your trading routines. This is done in segments, first beginning with how you’ll start your day (pre-market) and how you’ll end your day (after-market). Both routines will help you gain an edge in your investment and trading goals, and developing these routines early on will allow you to be constantly in control of your portfolio.
Your routine should help you accomplish the following tasks:
- Getting yourself up to date on the market;
- Assessing your portfolio;
- Getting ideas as to what stocks might be ‘hot’ that day;
- Knowing if your positions have any new news that could cause volatility;
- Being ready to trade when the market opens at 9:30 AM EST.
Initially you’ll want to start your pre-market routine by reviewing your portfolio positions and determining if there are positions you wish to change. There are many tools available to you to assess the strengths (or weaknesses) of your positions. You’ll want to do a ‘sector search’ to see if there is news that has broken in the overnight hours that may affect your positions, you’ll want to search for a current quote on the securities and you’ll perhaps want to check the Edgar database to see if there were any late filings which may affect the price of your positions. Once you’ve done your research you can determine if you will need to adjust any stop loss orders you may have placed.
Now you will want to review the overall market news. This can be done online or through television (stations such as CNBC) and determine what the overall market sentiment for the day is, find out how overseas markets finished, what currency rates are and other information that might be pertinent to the overall market; check for growing sectors, sectors that may be of particular interest or those that have lost some interest and finally check all of your current holdings for news, earnings, etc.
Now it’s time to develop your trades for the day (if you’re doing day trading) and you can do this by searching for possible opportunities that might include buyouts, takeovers, mergers or other types of events that can affect a particular position. There are many avenues that you can use for this including websites who track SEC filings or even by reviewing SECFilings.com which sent out notifications as soon as a new filing occurs. The other analysis you will want to review using a reputable financial website is which sectors might be performing well and might be prudent for trading.
You’ll want to check pre-market quotes since pre-market trading takes place from 8:00 am to 9:30 am (EST) to get an idea of what stocks might be moving on early trading. NASDAQ Pre Market Indicator is typically a good source for this information.
Your pre-market routine will be critical to your success as a trader. Pre-Market routines help you locate trading opportunities and plan your day so that you are not spending market hours devising new plans but rather using your resources and following through with proper planning.
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