Don’t Sell Your Stocks First Thing In The Morning!

We’ve had some panicky days in the stock market in the last six months. Panic is contagious and when you see that ticker going down day after day, its easy to get caught up in all the negativity. It is understandable that you might decide to sell a stock or two but one thing you should try to avoid is selling first thing in the morning.

Evenings are when a lot of people come home, read or watch the news, look at their portfolios, and make decisions to sell. They often don’t have time to make such decisions at work or have time to execute the trade. That is why they do it in the evenings when the markets are closed. The overnight hours often see the sell orders pile up, especially in times of high market volatility and that will drive stock prices even lower in those first minutes of trading.

If you must input a trade while the market is closed, you might think of putting in a limit order. That way you will never find out later that your stock did sell like you wanted but at an alarmingly low price because of so many sell orders caused by panic in the opening minutes of the market being open.

The best example of this we have seen in a long while was August 24, 2015 when the Dow dropped a breathtaking 1100 points within five minutes of opening. Called a “flash crash” it was a real life example of how panic can get out of control and anyone who sold in that fist 30 minutes Monday morning lost more than they needed to as the market rebounded throughout the day to “only” lose about 500 points.

I used to sell right at the open just like I described above but don’t do it anymore, choosing instead to wait a while to see how things go in the opening hour. That way my sell orders don’t get caught up in any silly selling frenzy and cost me more money than need be.

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