Community Forex Questions
Why is the first 30 minutes after a market opens considered risky?
The first 30 minutes after a market opens are considered risky due to heightened volatility and unpredictable price movements. This period often reflects traders’ immediate reactions to overnight news, economic data releases, or earnings reports. As market participants rush to adjust their positions based on fresh information, sharp price swings and large bid-ask spreads are common.
Institutional traders and algorithms also become active during this window, adding to the chaos. Their large orders can cause sudden surges or drops, trapping retail traders in unfavourable trades. Liquidity may also be uneven, while volume can be high, order flow is often erratic, leading to false breakouts or whipsaws.
Many experienced traders prefer to wait 15–30 minutes after the open for prices to stabilise and trends to develop. This pause allows for clearer signals, reduced spread costs, and a more accurate assessment of the true market direction. For new traders, jumping in too early can lead to emotional decisions, poor entries, and avoidable losses.
While the open can offer profit opportunities, especially for scalpers, the risks often outweigh the rewards for most traders. Having a disciplined approach and waiting for confirmation can significantly improve trade outcomes during this high-risk period.
Institutional traders and algorithms also become active during this window, adding to the chaos. Their large orders can cause sudden surges or drops, trapping retail traders in unfavourable trades. Liquidity may also be uneven, while volume can be high, order flow is often erratic, leading to false breakouts or whipsaws.
Many experienced traders prefer to wait 15–30 minutes after the open for prices to stabilise and trends to develop. This pause allows for clearer signals, reduced spread costs, and a more accurate assessment of the true market direction. For new traders, jumping in too early can lead to emotional decisions, poor entries, and avoidable losses.
While the open can offer profit opportunities, especially for scalpers, the risks often outweigh the rewards for most traders. Having a disciplined approach and waiting for confirmation can significantly improve trade outcomes during this high-risk period.
The first 30 minutes after a market opens are considered risky due to high volatility and unpredictable price swings. This period reflects traders reacting to overnight news, economic reports, and global market movements. As orders placed before the open are executed, large buying and selling volumes create sharp fluctuations that can trigger stop-losses or mislead traders with false breakouts. Liquidity may also be uneven, causing erratic spreads and rapid price changes. For inexperienced traders, entering trades during this time without a clear strategy can result in emotional decisions and losses. Many professionals avoid trading immediately after the open, instead observing price action to gauge market direction. Waiting allows for more reliable trends and better-informed entry points as volatility settles.
Jul 17, 2025 02:21