Naive people trade stocks just after the market opens?

Question

Is it true that naive investors are the ones who prepared their orders last night, and are the first trades made just after the stock market opens?

It is also said that the ones who trade stock futures before the open, tend to be knowledgeable institutional investors

True or false?

Any statistic/study to confirm/deny this?


tnx

Answer 1

I don't know if any statistics prove it but I've read what your saying from a trading book...

... it said that amateurs trade stocks at open and professionals trade in the afternoon.

It makes sense because amateurs aka retail traders usually have day jobs and put in their orders while the market is closed.

Answer 2

Not being an expert but having experience in the market I can tell you with out doubt, anyone who trades and is not knowledgeable, is a loser or just plain lucky.

Fact is; the market relies on stupidity. That is; it's the small investor that pays for a significant portion of the profit made by those that have knowledge of how it works.

The professional trader can make profit whether the market goes up or down, it's the experience that counts.

When you ask true or false about preparing to buy the next day futures, my first reaction is: If you've already prepared why wait? Futures trading is just what it says: Your paying today's price for a cargo boat that is scheduled to show up at a later date (simple description), hoping the price has inflated when you sell or trade it.

I am my own source.

Answer 3

Does it matter? If you are saying that people buying in the morning are less experienced and are probably paying too much, then guess who is selling it to them? The experienced people!!!

So all of the experieneced people know this and they are trying to sell. This drives the price down, so the inexperienced traders that put in market orders are getting lower prices.

It all works out, kind of.

With that said, I agree with the people above. If you do not do your homework, you will lose your shirt!!!!