The intraday battle has many different time zones.
The market starts off like a 40 yard dash form 9:30 - 10:30 am est. Although the equities markets are open from 9:30 a.m. to 4 p.m. EST, which is six and a half hours, there are not six and a half hours of solid opportunities. In fact, I believe there are usually one to two hours at best that provide tradeable opportunities during the day. It then proceeds to slow down but maintains a steady pace until 11:45 - 12:30 pm est. The markets then slow down into a sleep period which I call Dead Zone until 2:30 - 3:00pm est for the final dash into the close. This is how the market pretty much paces itself every day.
This can be hard for many traders to swallow but if you go back and review your trades, in most cases, the profits usually come in the first and last hour. The losses usually come in the form of head fakes and stops from the four hours between 11 a.m. to 3 p.m., which is also referred to as the deadzone.
The "intraday fertile trading environment" is the opening hour from 9:30 a.m. to 10:30 a.m. (give or take 30 minutes). As a caveat, it’s best for less experienced traders to start at 9:45 a.m. after the opening chop slows a bit as the moving averages firm up. This is where the most volume, immediate followthrough and trending will take place. This is where you can make a trade and reverse it and still make profits on the overall trade because the volume is there. You can’t do this when the volume slows down in the valley period from 11-3pm (give or take 30mins). There will obviously be exceptions but keep in mind that they are just exceptions.
Pre-market
7:30 a.m. to 8:00 a.m.Mostly the big players play the markets, like institutions, specialists, and market makers. The trades executed in this time zone create gaps from yesterday’s closing prices.
8:00 a.m. to 9:30 a.m.The big players still have control, but some small players start to battle with the opening of Archipelago, Island, and other Electronic Communications Networks. Some traders have brokers who do not allow access to trade until 8:00 a.m.
Market open
9:30 a.m. to 10:05 a.m.The market officially opens. This is the fastest time of the day. The market makers and specialists battle with market orders from institutions, as well as small players. The volume is the heaviest and reversals can happen very quickly.
10:30 a.m.Another possible reversal zone.
11:15 a.m.Volume dries up as the market makers and specialists go for lunch.
11:15 a.m. to 12:30 p.m.Stocks tend to run out of steam and pull back to support/resistance areas. Any breakout patterns are not reliable because the big players leave for lunch and control goes to the second-in-command who does not have the power to go into full battle. He is only allowed to deal with small orders while his boss is at lunch.
12:30 p.m. to 1:00 p.m.Volume is still light and 1:00 p.m. is a possible reversal area.
1:30 p.m.Possible reversal area.
1:30 p.m. to 2:15 p.m.A continuing trend or sideways movement on low volume.
2:15 p.m.Big players come back from lunch and volume picks up.
2:30 p.m.Reversal area. An important reversal time because the big players have returned from lunch and execute larger orders. Volume noticeably picks up momentum.
3:00 p.m.Reversal area. Another important reversal time because the bond market closes.
3:30 p.m.Yet another major reversal zone. Profits from morning positions may be taken off the table, changing the direction of the trend.
4:00 p.m.The market closes. Note that you should close any positions you do not wish to hold overnight before 3:50 p.m. The last ten minutes of trading can be whippy on strong volume and does not give a clear picture of any trend. Traders who are not holding positions overnight are closing out their trades, and overnight traders are placing their bets for gap plays the following morning.
Post-market
4:00 p.m. to 8:00 p.m.Stocks can be active if news derived from earnings reports is released during this time, as well as any other non-earnings news.
