When day trading on the stock market in the United States, you could see certain patterns that are dependent on the time of day and tend to occur more frequently than not. These patterns, also known as trends, occur often enough for expert day traders to construct their trading strategies around them.

The stock market has a propensity to become less volatile, level out, and experience less activity in and around the New York lunch hour. This is one trend. Many day traders will cease trading anywhere from half an hour to an hour before this slowdown begins, and they won't trade again until well after lunch when volatility and volume begin to ramp back up again.

Other Common Tendencies

The stock market starts at 9:30 in the morning, and almost immediately, there is a push in one way. (You should allow a few minutes for it to get up and run.)

At 9:45 am: The first advance is often followed by a big reversal or retreat. This is often just a temporary change, after which the prevailing trending direction will resume its previous trajectory.

If the pattern that emerged at 9:30 am is still prevalent by 10:00 am, it will most likely be challenged around this time of day. Another moment when a large price reversal or downturn is likely to occur is at this point.

11:15–11:30 a.m.: The market is about to enter the lunch hour, and London is about to shut down for the day. This is when volatility will normally subside for the next few hours; nevertheless, this is also when the daily high or low will often be challenged. Before they stop trading for the day, European traders often liquidate their open positions or collect new ones. The market tends to "float" over the following hour or longer, regardless of whether or not the highs or lows are challenged during that time.

In New York, lunch is served between the hours of 11:45 am and 1:30 pm, so this window of time includes a little more breathing room. Day traders often try to steer out of the market during this period since it is typically the most tranquil time of the day.

Expect a breakout of the range created during the lunch hour to occur between 1:30 and 2:00 pm if the lunch hour is quiet. The market will often attempt to move in the direction it was trading in before the lull that typically occurs during lunch.

2:00–2:45 pm: As the closure draws near, many traders are trading with the trend in the belief that it will continue through the close. That might potentially place, but you should also be prepared for any sudden reversals around this time. On the other hand, many traders are more likely to cash in their winnings or increase their trailing stops closer to the current price during this period.

The hours of 3:00 and 3:30 pm are significant "shakeout" moments because they will cause many traders to liquidate their holdings. If a change in the trend that had been occurring up to this point occurs around this time, then the price will almost certainly start moving extremely strongly in the other direction. Expect some swift and large surges in the other direction of the past trend, even if it does manage to maintain itself over these times.

When engaging in day trading, it is important to maintain a flexible trading strategy and avoid being too committed to a single position or course of action. Between three and six o'clock hours, it might be exceedingly challenging to maintain a trade for an extended period of time.

The last hour of trading is the second hour of the trading day, which sees the most turbulent price movements. A significant portion of day traders only participates in the market between the opening and closing hours of each trading day.