A pre-market mover refers to movements in a stock’s price beyond regular trading hours. However, pre-market movers are not necessarily just the result of pre- and post-market trading sessions. Pre-market movers can be the result of absolutely anything that can affect the price of a stock. With that in mind, here are some key factors about pre-market movers that you should know before making any investments:
They can affect stock prices. Stock prices can be both massively affected by pre-market movers, as well as be the result of other stock prices. They can be the result of news, something that’s happened within the organization whose stock prices are changing, or even how many people have decided to buy a certain stock for whatever set of reasons. If a pre-market mover exists, these can also affect prices for other similar stocks on the market due to lessened demand for them. For example, if company X were to be experiencing pre-market movement, and company Y had a similar stock, the share price of company Y could be lessened considerably due to the fact that there could be less demand for it.
They can help you generate a trading plan for the day. Based upon information that you can receive from pre-market movers, and the resultant more informed assumptions that you can make on them, the generation of a good and reliable trading plan for the trading day approaching can be helped considerably. If you’re more informed on stocks that have fluctuated in price before the trading day even begins, you may be able to draw information from these changes and based upon them, make good assumptions on any more of the movements of that stock throughout the coming day, or indeed other similar stocks from similar companies. Furthermore, if you start your day by creating a trading plan that you believe will work with the market that day, you’ll be at a massive advantage when compared with other traders. After all, an informed decision is better than a guess when trading stocks.
Not everyone looks at them. Not everyone bothers looking at pre-market movers, nor do they bother analyzing the effects that they could have, or the reasons that these pre-market movers exist — even though this knowledge could transform the information and quality of assumptions that you make throughout your trading day. Therefore, it’s fair to say that should you look at pre-market movers, you’ll be putting yourself in a far better position when starting off the trading day when compared to a lot of other traders that will go in and trade away without their knowledge.
They can help you learn more than you expected. It’s essential to remember that pre-market movers can not only educate and benefit you on the trading day that is approaching, but they can also accelerate your knowledge of the stock market and its movement as a whole. If you choose not to inform yourself on pre-market movements at any time, you’ll be deliberately not informing yourself of how these movements can have a key effect on how the stock market is after the movements take place, as well as how the movements can affect other stock prices on the market due to their either lessened or increased demand.
Photo Credit: Arch_Sam
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