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Trading Tidbits and the Art and Science of Trading

Art and Science of Trading:


Life is unpredictable. Trading is as much an art as it is about science. Both will attempt to comprehend and explain the world around us. Art gives us the freedom to interpret and express thoughts. Science is undercovering order in a chaotic and unpredictable environment.


Life is short. In trading, stay humble, learn from your mistakes, embrace challenges, and seize the moment without hesitation. Do not have regrets.


Every trade is a lesson. And every lesson learned is an experience for growth and self-improvement.


Trading is not about winning every time. Successful trading is managing risks or containing losses and staying in the game over the long run.


Trading entails extreme emotions, swinging from fear to greed. Be steady and learn not to let emotions overwhelm you, and success will come.


Trading is not gambling. It is a skill learned through patience, practice, and perseverance.


Knowledge is power. Learn, educate yourself, and keep improving to stay ahead of the game.


Trading Tidbits:


What is the Halloween Strategy?


The Halloween effect or strategy is the opposite of the sell in May and go away strategy. The Halloween strategy refers to the bullish seasonality period in stocks between November 1st and May 1st. Investors purchase stocks after October 31st and sell in April of next year.


What is the best day of the month to buy stocks?


Stock prices tend to fall during the middle of the month. A trader may benefit by buying stocks near the middle of the month between the 10th and the 15th. Based on this, the best day to sell stocks would be the five days before the beginning and the end of the month.


What time of day is best to buy stocks?


The first hour or two of the trading day, or at the open, is when a large amount of trading and volatility occurs. Traders often analyze the previous day’s trading action and the latest news. After the opening of trade, trading activities slowed into noon. The last hour of trading, or at the close, can also lead to a surge in trading volume and an increase in market volatility as professional traders and institutional investors close or open trading positions before the end of trading. It may be best for investors and long-term traders to enter the market around midday when it is less volatile and most stable as high-frequency, algo, and computerized, and institutional traders have finished or slowed their buying and selling activities.


Is it better to buy stocks at open or close for active traders?


Active traders prefer a market with volatility and liquidity to capture the overall stock market price swings. It is reasonable to expect active traders will buy and sell stocks during the first hour of trading between 9:30 a.m. and 10:30 a.m. and the last hour of trading between 3 p.m. and 4 p.m. since the first and last hours of trading tend to experience a lot more volatility than during the middle of the day.


What day of the week that stocks trade lower?


The perception is markets tend to trend down on Mondays. Lower prices on Monday make Monday a great time to buy stocks and indexes for longer-term investors.


Why Monday may not be best for active traders?


Early Monday trading tends to be sluggish, leading to a lack of liquidity and a less-than-ideal environment. However, International traders, specifically European traders, wait for the release of US economic updates and corporate news before executing trades. Because traders analyze news, assess future trends, and adjust trading strategies, Monday is the least volatile day for active traders.


Why do short sellers love trading on Mondays?


Monday’s early selling tends to be influenced by higher levels of short selling as companies often release negative news on Friday after the close. The negative sentiments carry over into the weekend, leading to bearish sentiments during Monday morning trading.


On what day of the week are stocks trading near their lows?


Toward the end of the trading week, Thursdays and Fridays tend to be the worst trading days of the week for stocks.


Historically, the worst trading days of the month for trading stocks tend to be mid-month around trading days 13, 14, and 22.


The worst trading days of the year occur during trading days 35, 121, 111, 193, and 56.


What are the worst days to trade stocks?


Mondays and Fridays are challenging trading days. However, the latter (Friday) may be worse than the former. Excluding Monday and Friday, the best trading days of the week are between Tuesday and Thursday.

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