Pre-Markets Are a Great Way to Trade Ahead of Market Swing

To most Forex investors, a Pre-Markets investment is an investment strategy that focuses on the short-term price movements of underlying securities. Typically, they occur after an international market data leak or prior to a government report which can cause a sharp drop in currencies. The reason why this type of investment strategy works well is because it is very easy to identify the beginning stages of a bear market. This is when people begin to hold onto their money due to fear of the upcoming economic data leak or release.

PreMarkets

The second definition of Pre-Markets is that they are not affected by basic economic considerations and are rather price driven. In fact, many investors work with the assumption that the pre-market time frame is nothing more than an opportunity to purchase or sell stocks prior to the official release of the consensus estimate for the monthly job creation numbers for July. However, there are a number of indicators out there that provide investors with a unique opportunity to buy stocks before the job growth number is released. For instance, one indicator that can give you a clue as to what the job numbers might be is the trend line. A trend line is simply a line that defines where the closing price was during the previous trading day and the price will continue to follow this line until such time as the trend line is broken.

If you look at the charts from the past few years for the stock prices, you will notice that the highs and lows were often followed by a strong rally in the following days. Many investors have made money during these periods, since there was a strong anticipation of a good result based on the market data leak. Therefore, if you are looking to trade a pre-market stock then you will want to start looking for those occasions where there are high anticipation as well as low volatility. You will want to make sure that you do not trade on a Friday evening or any other time when the market has a significant move in either direction since you could potentially lose a large chunk of money.