How to Invest in Power Hour Stocks
Power hour stocks are great for making some quick profits. But, you need to know what you’re doing. This post will help you understand what power hour stocks are. Plus, it’ll help you understand how to find them, and how to trade them.
First, I’d like to make a distinction, though. Trading and investing are not the same thing. They’re related, but there’s one main distinction in the definition of each.
When I say “trading,” I mean short-term holding periods. The amount of time that passes between a buy and a sell is less than a year.
When I say “investing,” I mean long-term holding periods. Because the amount of time between a buy and a sell is longer than a year.
And keeping this distinction in mind will help with educating yourself about how to trade and invest. Because even though they may seem like the same beast, they each have very different rules. They have a lot of crossover information. But when you get down to it, the technique for handling each one varies.
Trading, and day-trading, can get you in debt very quickly. You can lose money fast. So only trade what you can afford to lose. Because, it’s expected that most if not all beginning traders will lose a lot of money.
I say this so that you will prepare yourself, not so you get scared away. Do your due diligence. And have reasonable expectations.
High Growth Industries for Power Hour Stocks
These industries are in no particular order. They are high growth industries that I believe will grow substantially in the coming years. And this isn’t based on one piece of evidence. This is based on what I’ve observed and seen in my years of investing experience.
- Technology – Blockchain will likely be a big one. Also, AI and medical technology, which brings us into the next one.
- Healthcare/Biotech – Like new technology, constant innovations on health products and services seem to never meet our demand. Also, health insurance and the industries surrounding it are likely to grow significantly.
- Cannabis – Cannabis stocks seem to grow so fast. I’m not sure how much momentum the industry can keep up, but it may continue to be a fast growing one for some years.
What are Power Hour Stocks?
Power hour stocks are those stocks that have high volatility in the morning and afternoon. These two hours are usually 9:30am-10:30am EST and 3pm-4pm EST. They’re the first and last hours of the trading day.
How do power hours work? Well, it helps to understand how humans think. When there is news released about a certain company, there’s a good chance there will be a big power hour. That’s because people see that and begin flocking to the stock.
Another factor that plays into it is that there are many people who make a lot of trades in the early morning. They are getting things done so they can either get other work done or enjoy the rest of the day.
The afternoon power hour has to do with getting trades in before the market closes for the night.
The high volume creates higher volatility in the stock price. And it creates some great opportunities for making profits. That’s whether the stock rises or falls. I’ll talk more about this below.
You can also find some power hours that are even more volatile, like the afternoon power hour on a Friday.
Many traders are trying to get their trades in before the weekend, so there is a mad rush. And that creates high volume. So, that high volume creates high volatility, and potential to make bigger profits.
Power hours take regular stocks, and give them a little speed. And a boost up or down. And which way it goes depends on what’s going on with the company.
They’re usually triggered by recent earnings reports. Or other news surrounding the stock. If the news is good, there will be a bullish power hour. And if the news is bad, it only makes sense that it will be bearish.
How to Trade Them
Above I mentioned that you can make profits from power hour stocks whether they rise or fall. Obviously, you want there to be some buzz around the stock before you decide to trade it.
If it is positive buzz, then that’s great. You can trade as normal.
But sometimes the activity is negative. And it only makes sense that the stock will likely become a bear.
You could move on to a different stock. Or you could do what’s called a short sell. You’ll better understand this one if you follow along and imagine doing each step in this process.
It’s sort of a trade made backwards.
First, you borrow stock from the company that you think will go down in price. Then, you wait for the stock to go as low as possible. And finally, when the price is nice and low, you sell. The actual funds will come into your account. Then, you either pay your fees and the lender back, or that amount is automatically subtracted.
You make a profit without having invested any money.
As far as regular trading of power hour stocks, you can make big profits with that method, too. You also need to be careful with regular trading. Because its difficulty is so underestimated, it can become very dangerous to trade.
But, there are some other common methods of trading power hour stocks.
One of those is buying the morning and selling the afternoon power hour. Another is buying the afternoon and holding overnight. Then, in the morning, it could rise, and you can sell to make a profit.
It’s important to understand what the stock is doing and why. It’s also important to use that information to predict what the stock will do in the short and long term.
Power Hour Stocks for Traders
Literally any stock can be a great power hour stock.
But, it helps to be trading stock in flourishing industries. Like technology or cannabis. Also, you want to look for recent earnings reports or news surrounding the company. And try your hardest to find pieces of info before they get out to major press. This will likely give you the advantage over other day-traders.
If you have that information before most others, you can make a game plan with ease. And you can also buy in earlier, giving you a price advantage. Because buying lower will make you more profit when you sell high.
Decide if the news is positive or negative. And decide whether you want to trade that stock. Choose your strategy. And figure out whether you want to trade afternoon or morning power hours. Or both?
Come up with a game plan, and stick to the plan. Come up with goals for your power hour trading. But make sure they’re reasonable.
If it’s your first time investing, it’s likely you’ll lose money. But, if you stick with it and commit to learning how to profit, you will make money.
Educate yourself and test things out with small amounts of money. Thinkorswim is a great platform to use the tools you need to get started trading power hour stocks.
You’ll learn along the way, and have fun doing it.
About Vanessa Adelman
Vanessa Adelman graduated with an Interdisciplinary degree. She majored in Entrepreneurship, Painting, Music and Film. Shortly after, she received a copywriting mentorship with Mark Morgan Ford. Then, she earned her AWAI Verification. Now, Vanessa freelances in the financial direct response industry. She’s been investing since 2016. In her free time, she enjoys books about money and wealth. She loves being with her boyfriend, hunting, fishing and going on outdoor adventures.