How the Pros Handle After Hours Trading

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It is often assumed that the professional traders will buy and sell in the pre-market and after-hours trading sessions because they want to be able to react quickly to news announcements that may occur when the regular market is closed. But is there really an advantage to trading during off hours?

Stock prices change – sometimes moving quite rapidly, forming price gaps – for a given stock when the company’s management team, stock analysts, and others release new information. These gaps are particularly dramatic during earnings season when companies are disclosing their financial performance for the previous quarter and their outlook for the coming year.

Sometimes these important news releases occur during regular market hours; but, most of the time important news releases are issued during pre-market and after-hours trading sessions.

New traders often assume that since price gaps most commonly occur between one trading day’s close price and the next trading day’s open price that they will be able to buy, or sell, the stock somewhere in the middle of the gap either after the market closes or before the market opens the next trading day. However, that is usually not the case.

Unfortunately, there are very few things that provide a true ‘edge’ for short term traders. Trading during off hours can provide a slight edge from time to time but it also comes with some potential risks.

One thing that can give traders an edge is anticipating big moves before they happen and being on the right side of trends. With VantagePoint, you can often catch the overnight gaps in stocks and other assets because the software gives advanced warning of changes in market directions.

VantagePoint uses neural network technology to analyze the data to find the twenty-five related markets that most affect prices of your target market, quantifies the degree of influence these related markets have on your market and then uses that information to forecast trend direction, market strength and daily trading ranges in a simple-to-read chart and report. You have a complete forecast for the market you are trading in less than five minutes the night before so you can be prepared to profit from the after-hours trading sessions.

Trading Up: Harnessing the Power of 52-Week Highs, Superior Relative Strength, and Artificial Intelligence for Better Trading Results!

Here is a chart of Apple ($AAPL). Over the last 3 months a consistent winning strategy has been to sell call credit spreads as the market has fallen. Over the last month as $AAPL has consolidated selling put credit spreads has also been profitable.