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trades, which are large block trades that kick in automatically and that have been placed earlier in the morning. |
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This stage begins at about 2:15 P.M. EST (11:15 A.M. PST) and lasts until market close at 4 P.M. EST (1 P.M. PST). The close is further divided into the period from 2:15 P.M. until about 3:30 to 3:40 P.M. EST and then the rather frantic action that takes place in the last 20 minutes or so before the market closes. |
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Active trading takes place during the first part of this stage, oftenbut certainly not alwaysfollowing the trend established in the morning. On a more volatile, news-driven day, the trend reverses in the afternoon and there may be a steady sell-off after the market has been up through the morning and mid-day. Or, there may be a shift in trend in the other direction, as buyers come in and prop up what has up to then been a sagging market. Obviously, making generalizations about what may typically occur at any given stage is tough to do. |
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The last 20 minutes or so is like the opening 20 minutes, a volatile time, a dash to the finish line, wherein stocks may rise quickly and then fall just before the close due to individual and institutional traders jockeying for position as they close out the day. Many fast-moving stocks that have been up for the day will have a sell-off in the last 10 or 15 minutes or so, as day traders exit their positions to lock in gains and go home "flat." |
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Market makers have the upper hand during this period, just as they do at the open, as they know what orders are on file to be executed at the close. They will attempt to bring the stock up if there is strong buying momentum and they expect the stock to open strong the next morning. |
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This is a period that the inexperienced investor should avoid like the plague. It is not the time for even more experienced investors to enter a position, no matter how anxious you are to buy the stock, unless you can time your buy literally five minutes or less before the close. Remember, with the growing awareness and availability of trading in the after-hours market, you will always have a chance to buy a stock if you believe you must have it due to an anticipated news release or for some other reason. |
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Because stocks can be easily manipulated during the last few minutes by market makers, it is best for online investors to know the |
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