How Premarket Trading Can Help You Make Money Alongside Your Full-time Job

In India, the stock markets opens between the times of 9:30 am and 3:30 pm every day. During those times, millions of people trade billions in stocks and shares at a rapid almost break-neck speed. But the timings make trading hard for corporate employees — most of the trading happens while people are at work. 

But what happens before the stock market officially opens? More importantly, what is pre market trading? Depending on the kind of brokerage you use, you might find that you’re able to get ahead of the curve in the trading market by buying and selling stocks before the opening bell rings. While it generally isn’t a good idea to do this too often, you’d be surprised by all the benefits that come with premarket trading in the right circumstances, and know the stocks to watch and target. And it’s ideal for people with full-time jobs — they can usually trade the markets before they leave for work.

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When to Use Premarket Trading

Like most things in the trading world, understanding how to make the most out of the premarket involves building the right kind of strategy. Often opening at around 4am each morning, the premarket trading environment uses electronic communication networks to allow investors to buy and sell stocks as early as they like. This is often an excellent opportunity for people who want to get ahead of the market reactions to important news, like political instability or economic events. 

The exact time you can use premarket trading tools will depend on your brokerage. However, the most important thing to remember is that this kind of trading won’t be suitable in every situation. More often than not, the best time to use the early hours trading floors is when you need to respond to a sudden change in the market that’s going to have a huge impact on your wealth. For instance, if you have a lot of money in a stock that you know is going to lose its value the next day, you could attempt to get ahead of the game and sell your shares early, before you take too much of a loss. You could also take the opposite approach and buy a lot of shares if you have a behind-the-scenes hint that the price is going to skyrocket the next day. 

Taking Advantage of Premarket Trading

The biggest advantage to trading ahead of the opening bell is that it gives you a chance to react to announcements from industries or companies that you’re investing in instantly. Unfortunately, the limited liquidity and high volatility of the market could mean that you fail to get the results that you want, even if you do get up at 4am to start trading. An alternative to using premarket trading to get ahead of news events is to simply use it to gather information instead. In fact, many experts rely on the premarket to give them an insight into what’s happening in their chosen sectors, so that they can make better trading decisions the next day. 

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