The absolute worst time to trade: The 9:30 AM W i l d W e s t. (Post 13/45)

\*(If you wish to read my previous posts, f o l lo w me!)\*

Welcome to post #13.

At the end of the previous one I said we would be discussing the worst time of day to trade penny stocks!

It is the first half hour after school starts. 9:30 AM to 10:00 AM Eastern time.

In the trading world this is the Wild West. And it's where novices accounts end up.

This is what happens. Promoters have been talking the penny stock on Twitter, Reddit and Discord all night and all morning. They create a huge buzz. You're sitting with thousands of people at their desks at 9:29 AM, with their fingers poised over the "buy" button waiting for the market to open.

The bell rings. 9:30 AM hits.

At the same instant, thousands of buy orders are placed on the market. The stock rises immediately by 20%, in just two minutes. The beginners are in their happy places. They believe that they have captured a rocket.

But don't forget our lessons on the Pump and Dump? At 9:30 AM, the people who are being bought the hype are those who are selling it.

The pros. The promoters. The men who purchased yesterday afternoon at a reduced price. This big blind wave of novice investors is just to unload their bags.

At 9:34AM, the buying suddenly ceases. The selling time begins. And the merry old stock plummets.

This pattern is known as “Gap and Crap” or “Morning Washout.” It is a very quick process and sometimes when the price drops so rapidly, your stop loss may be missed as well. You can lose 50% of your money in 3 minutes.

The first 30 minutes of the market is raw and raw emotion. No actual patterns have been developed in the charts. There are no support floors constructed for the day. It's only chaos, panic, and bot trading that attempts to capture retail traders.

The professional rule? Sit on your hands.

Please don't press any button prior to 10:00 AM.

Take the amateurs at their word at the opening bell. Allow the promoters to sell their shares. Allow dust to settle. You should wait until the stock does start to settle and begin to draw a true, readable candlestick chart as you outlined in post #6.

A penny stock that is well made and has some good real news will live through the morning washout and you will get a nice clean entry at \~ 10:30 AM.

However, to find that safe entrance, you'll require the ultimate cheat code indicator. It's just a line on your chart that points to who owns the stock.

We'll set this line up on your screen in post #14. It’s called VWAP.