One of the times of day when price movements are most likely to be significant in day trading is
the 9:00 AM market opening
.
Trading volume increases all at once, and
stock prices can move significantly in just a few minutes.
Therefore,
“Wouldn’t it be easier to make a profit if I bought immediately at the opening?”
you might think.
However, I
do not buy immediately just because it is 9:00 AM
.
What I look at is
how the stock moves after the opening.
Furthermore,
the Nikkei Stock Average.
The sector.
The change from the previous day.
The daily chart.
VWAP.
Trading volume.
and other factors are combined to
determine whether a stock is worth considering for a buy right from the morning, or if it is better to wait.
I will judge this.
In this article, I will explain how to think about the market opening for day trading.
I am live streaming on YouTube every day at 8:30 AM! “How much can I grow 1 million yen?”
In this episode, I entered a long position on Furukawa Electric and took profit, and entered a short position on SUMCO and took profit. It was a session where I made about 80,000 yen in the morning session. I think the timing of entries and profit-taking will be helpful.
I do day trading live streams on weekday mornings starting at 8:30.
On YouTube, I do day trading live streams on weekday mornings starting at 8:30.
I don’t start the stream at 9:00,
but prepare 30 minutes before the market opens
I do this.
What I check is,
and so on.
And when it hits 9:00 AM,
I check whether the
actual price movement matches
the scenario I prepared in advance.
If you want to know what I am looking at right after the opening, please also refer to my morning live stream.
What is the opening?
The opening is,
the first trade executed in the market that day.
In the Japanese stock spot market, trading begins at 9:00 AM.
However,
not all stocks necessarily open exactly at 9:00 AM.
If buy or sell orders are heavily skewed,
special buy quotes or special sell quotes
may occur, which can delay the opening.
In other words,
9:00 AM does not mean all stocks start at the same time
is not the case.
Why is there significant price movement at the opening?
While the market is closed,
various information is released.
For example,
and so on.
Orders that accumulated while the market was closed
clash all at once at the opening.
Therefore,
At 9:00 AM, trading volume and price movements tend to increase
significantly.
The battle begins before the market opens.
I, for one,
do not start looking for stocks after 9:00 AM,
but prepare my watchlist starting in the 8:00 AM hour
.
For example,
stocks that were strong yesterday.
Stocks with positive news.
Stocks with good daily charts.
Stocks in strong sectors.
Stocks that moved significantly the previous day.
And so on.
If you start searching from scratch
the moment it hits 9:00 AM,
you will panic when you see the large price movements.
What to check before the opening ① Nikkei 225 Futures
First,
check where today’s market is likely to start
Check the following.
If Nikkei 225 futures are significantly higher.
then,
many stocks may open with a gap up.
Conversely,
if futures are significantly lower.
then,
more stocks may open with a gap down.
However,
high futures do not necessarily mean you should buy at the opening.
is not the case.
Check the actual direction of the index after 9:00 AM.
Things to check before the opening ② News/Catalysts
Check if there is any news
for the stocks on your watchlist.
For example,
strong earnings reports.
upward revisions.
dividend increases.
or share buybacks.
Large orders.
Business alliances.
Bad news.
And so on.
It is not guaranteed that the market will start under the exact same conditions as the previous day.
Understanding why a stock is gapping up or gapping down
is crucial.
Read also: About the day trading practice game, membership, and free gifts created by an active trader
3. Daily chart to check before the opening
I don’t just look at the 5-minute chart;
I place significant importance on the daily chart.
For example,
a stock that is gapping up.
However, looking at the daily chart,
it is right below the recent high.
A price range where it has been sold off many times in the past.
In that case,
there is a possibility that profit-taking selling will occur after the opening.
Conversely,
A position where it looks like it will break through the high on the daily chart.
There is little major resistance above.
In that case,
I also consider the possibility of further gains.
Things to check before the opening ④ Change from the previous day
Comparing it to the previous day’s closing price is also important.
For example,
Stock A +1%.
Stock B +3%.
Stock C +7%.
If they are in the same sector,
Stock C is quite strong.
However,
I do not buy just because the change from the previous day is high.
I check whether it is truly relatively strong compared to the Nikkei Stock Average or other companies in the same industry.
I look at that.
Things to check before the opening ⑤ Indicative price
By looking at the indicative price,
you can confirm around what price it is likely to start.
However,
based on the indicative price alone,
you cannot determine
that it will definitely go up today.
Order conditions can change before the market opens.
Therefore,
I use the indicative price
as material for creating a scenario.
So, what are the stocks you should buy at the opening?
I am most inclined to consider buying right from the morning
for stocks that meet multiple conditions.
For example,
the market sentiment is strong.
Furthermore,
the sector is also strong.
Among them,
the individual stock is also strong.
The daily chart is also good.
There is also trading volume.
And,
it is actually being bought even after the opening.
This is the kind of situation.
Stocks to consider buying (1): Stronger than the market sentiment
For example,
Nikkei 225 is up 1%.
Stock A is up 5%.
Furthermore,
it continues to hit new highs after the opening.
In this case,
it is significantly stronger than the overall market.
I pay attention to such
relatively strong stocks
.
Stocks to consider buying (2): The sector is also strong
For example,
semiconductor stocks are rising across the board.
Among them, Stock A is particularly strong.
In that case,
it is not just about individual news, but
Buying across the entire sector
also acts as a tailwind.
The ideal is
strong market sentiment × strong sector × strong stock
.
Stocks worth considering for purchase ③: Not sold off even after a gap up
For example,
Previous day’s closing price: 5,000 yen.
Gaps up to 5,200 yen.
Normally, there is a possibility of profit-taking selling.
However,
Opens at 5,200 yen.
5,210 yen.
5,230 yen.
5,250 yen.
It is bought even further.
In this case,
it shows that buying demand continues even if it starts high
.
Stocks worth considering for purchase ④: Bought immediately even after a dip
Rather than chasing a sudden surge,
I sometimes wait for a pullback.
For example,
it opens at 5,200 yen.
It rises to 5,300 yen.
It corrects to 5,240 yen.
It stops falling there.
It hits 5,280 yen again.
In this way,
I confirm that buying actually comes in
at the dip.
Stocks to consider buying ⑤ High trading volume
Even if it is strong at the opening,
be careful with stocks that have low trading volume.
If the volume is high,
trading is active.
Furthermore,
if the stock price is also rising,
then
many market participants are trading it.
I look at
price movement and trading volume as a set
together.
Conversely, what about ‘stocks you shouldn’t buy immediately at the opening’?
This is also important.
Just because a stock is up first thing in the morning,
doesn’t mean you can buy all of them.
Let’s look at the patterns I am cautious about.
1. Stocks that gap up too much
For example,
Previous day’s closing price: 5,000 yen.
Opening price: 5,700 yen.
A significant gap up.
It looks very strong.
However,
it has already started from a state of having risen considerably.
If you buy there,
you may get caught in profit-taking sales immediately after the opening.
In the case of a significant gap up,
will the buying continue even after the opening?
Check the following.
2. Stocks that are sold off the moment they open
For example,
A gap up to 5,500 yen.
Immediately after opening,
5,450 yen.
5,400 yen.
5,300 yen.
It plummets.
This is,
a potential “opening high,” where the opening price becomes the high for the day.
It is possible.
It is important not to buy just because it is gapping up.
3. Stocks moving in the opposite direction of the Nikkei Average
For example,
The Nikkei Average plummets.
The overall market is also weak.
In that environment, only Stock A rises slightly.
It may indeed be strong.
However,
You may also get caught up in a market-wide decline.
In such cases,
check why only stock A is strong.
I will confirm this.
4. Weak stocks within a sector
For example,
Semiconductor stocks are rising across the board.
A +6%.
B +5%.
C +4%.
D -1%.
In this case,
D is clearly weak within the same sector.
I do not think of buying a stock that is weak when the Nikkei Average and the sector are both strong,
thinking that it is just lagging behind.
There may be a reason why it is weak.
5. Stocks that repeatedly show upper shadows
After the opening,
it rises.
However, it is immediately sold off.
It rises again.
It is sold off again.
Upper shadows continue to appear on the 5-minute chart.
In this case,
there is a possibility that many participants want to sell at the high price.
I look at,
not just the fact that it rose, but how it reacted after rising
as well.
6. Stocks with low trading volume
Trading is light even though it is the start of the morning.
The order book is also thin.
Prices jump.
For such stocks,
you may not be able to trade at the price you intended.
Especially in day trading,
not just whether you can get in, but whether you can get out
is also important.
Immediately after the opening, the VWAP has not yet stabilized.
I often use VWAP.
However,
Immediately after 9:00 AM, there is little trading data for the day,
and the VWAP is still in the process of forming.
Therefore,
I do not judge based solely on the VWAP immediately after 9:00 AM,
thinking, “It’s above the VWAP, so I’ll buy.”
As time passes,
the significance of the VWAP becomes clearer.
Caution is also needed for the 5-minute 25MA in the morning.
Similarly,
during times when there is little 5-minute chart data for the day,
you cannot rely solely on the 25MA.
Therefore, at the opening,
daily chart,
change from the previous day,
market sentiment,
sector,
trading volume,
and actual price movement.
are important.
and other factors are given more weight.
Waiting for the first 5 minutes is also an option
Immediately after the opening,
price movements can become extremely volatile.
Buy.
Sell.
Take profit.
Cut loss.
New order.
Various orders are concentrated.
Therefore,
if you are unsure of the direction,
waiting out the first few minutes
is also an option.
There is no need to take a position at exactly 9:00 AM.
What to look for in the first 5 minutes of the opening
For example,
9:00 to 9:05.
I look at,
which direction it moved in
I look at.
Furthermore,
What is the Nikkei Stock Average doing?
What about the sectors?
What about the stocks on the watchlist?
What is the trading volume?
Did it hit a new high?
Did it break below the low?
Based on this information,
I judge the initial movement of the day.
Opening highs and lows are important
The highs and lows formed first thing in the morning
may continue to be watched afterward.
For example,
the high after the opening is 5,300 yen.
It drops once.
It reaches 5,300 yen again.
If it breaks through there,
then
there is a possibility that it will gain upward momentum.
Conversely,
If it is repeatedly sold at 5,300 yen,
it may be acting as resistance.
It is not too late if you cannot buy at the opening
This is quite important.
9:00 AM.
Sudden surge.
I couldn’t buy it.
Therefore,
jumping in at the high at 9:03 AM.
This is something I want to avoid.
My main trading time is
9:00 AM to 10:30 AM
.
Even if you cannot buy at the opening,
after that,
dip.
VWAP.
5-minute chart 25MA.
High price breakout.
and so on.
there may be other opportunities.
Rather than buying at the opening, “finding today’s strong stocks”
I do not consider the opening to be
simply
the time to enter at 9:00 AM
as such.
Rather,
a time to identify the day’s strong and weak stocks
I believe it is quite important as.
As the market actually moves from 9:00 AM,
the difference between pre-market expectations and reality becomes clear.
Do not cling to pre-opening expectations
For example,
at 8:30 AM,
Stock A looks strong.
A candidate for buying.
However, at 9:00 AM,
Stock A plummets.
The same sector is also weak.
The Nikkei Stock Average is also falling.
In that case,
discard your morning forecast.
It is not a matter of “I’m buying because I planned to buy.”
Do not do that.
Prioritize the actual price movement.
7 points to check at the opening
I will summarize them at the end.
1. Market Sentiment
Is the Nikkei Stock Average trending upward or downward?
2. Sector
Are related stocks for that ticker also strong?
3. Change from Previous Day
Is it stronger than the market or industry peers?
4. Daily Chart
Is there no resistance line above?
5. Gap Up/Gap Down
How did it move after starting high or low?
6. Trading Volume
Is capital actually flowing in?
7. Reaction after the opening
Will it continue to be bought, or will it be sold off immediately?
The opening is the time for ‘checking the answers’
Before the opening,
you can make various predictions.
Futures are high.
There is news.
The indicative price is high.
The daily chart looks good.
Therefore, it seems like it will rise.
However,
what is ultimately important is
how market participants actually traded after 9:00 AM
.
I,
create a scenario before the opening.
And then,
I check the answers after the opening.
That is the mindset I use when watching.
Summary
At the opening of day trading,
“buying because it went up”
“buying because it gapped up”
is not the way to go.
First,
check the market sentiment.
Check the sector.
Check the change from the previous day.
Check the daily chart.
Check the trading volume.
Then,
confirm whether it is truly strong even after the opening.
I check this.
I find it easy to consider buying when it is in a state of
strong market sentiment
×
strong sector
×
strong individual stock
×
continued buying after the opening
.
Conversely,
it is a sharp drop despite a gap up.
It is weaker than the sector.
It is weak, moving against the Nikkei Stock Average.
There is no trading volume.
It repeatedly shows upper shadows.
In such cases,
there is no need to force yourself to buy right from the opening.
Precisely because price movements are large at the opening,
I believe it is more important to “confirm what is strong” than to “get in early.”
I believe this is important.
I host a live day trading stream on YouTube every weekday morning starting at 8:30 AM.
Before the opening, I check Nikkei 225 futures, quote prices, daily charts, and news, and once it hits 9:00 AM, I narrow down my watchlist while observing actual price movements.
If you want to see “what I am looking at during the opening” in an actual market, please use my morning live stream as a reference.
Related Articles
Day Trading: The 9:00 AM Opening is Crucial – 5 Points to Check in the First 30 Minutes
I explain how to view the 30 minutes starting from 9:00 AM, focusing on the time frame.
Day Trading: Look at the Previous Day’s Close – How to Distinguish Strong and Weak Stocks at the Opening
I explain how to find relatively strong and weak stocks at the opening.
Day Trading: Watch the Nikkei 225 – How to Use Indices to Judge Buying and Selling
I explain how to view market conditions, which are also important at the opening.
Day Trading: Target Strong Sectors – How to Find Stocks Where Capital is Concentrating for the Day
I explain how to narrow down from the overall market to strong sectors, and then to even stronger individual stocks.
Is Jumping into Trades Dangerous in Day Trading? Reasons Not to Buy Stocks That Have Suddenly Surged
We explain the points you should check before chasing a sudden surge immediately after the market opens.
*This article does not recommend specific stocks or trading methods, nor does it guarantee profits. Please make investment decisions at your own risk.
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