Pre-market trading refers to the trading that is conducted before the stock market opens. Most stock traders use this as an opportunity to react to the news reported at the time on the market was closed. When it is done right, pre-market trading can give you a significant price advantage before regular trading begins. You should have ever been aware of the many risks and limitations associated with it to ensure that you do not make any losses. Given how crowded the stock market is during the open trading hours, the pre-market trading session can be a good opportunity for you to take advantage. You should have ever taken some time to research on the pre-market in stock trading before you delve into it to ensure that you are making investment decisions that are going to turn out profitable. There are several things you need to remember when engaging in premarket stock trading. This website provides you with all the information you need to know about premarket stock trading and how you can take advantage of this window.
When participating in a premarket stock trading session, you need to make the right preparations to place an order. If you do not have an online trading account, make sure you create one before time. Also, make sure that you are working with a brokerage firm that allows pre-market trading since not all stock trading firms have this option. You should also understand the pre-market trading hours set by the farm since they vary from one company to another. It is also important that you analyze the risk to determine how cost-effective it is to enter the market and make a pre-market order or wait until the market opens.
Once you are ready to trade, look at the different options available, and find the stock you are most comfortable trading in. When you log into your trading account, go to the order entry page and enter the stock symbol and the number of shares you want to buy. Make sure you look at the current bid range before you enter your price. In most cases, you are going to find limit orders which base their price on the most recently completed buy and sell trade. This information can be quite effective when it comes to setting a limit order price that can be easily filled.
After doing this, it is the right time for you to enter your order. You should be able to locate the order booking on your order entry page. You can choose to work with pre market of destination under routing. Failing to make a selection means that the order is going to be placed for the regular trading session and you will have to wait until the markets are open. After selecting an ECN from your broker, you can route the order by clicking the trade button. You should however remember that placing a pre-market trade as a market order is going to be rejected since the markets are not open and it should, therefore, be entered as a limit order at a specific price range if it is to be accepted.