Feb. 6, 20207 min read

Pros & Cons of Early-Bird vs Night-Owl Approach to Your Off-Market Research

Written by stockstotrade

Are you a ‘lark’ or an ‘owl’? Do you like your trading research done by noon? Or, do you prefer to burn the midnight oil, when there’s no one around to take you off of your very important research into trading opportunities and market trends?

Pros & Cons of Early-Bird vs Night-Owl Approach to Your Off-Market Research

Either way, we have compiled a pros-and-cons list of doing your off-market research in the evenings or before the markets open. We’ll give you tips to help you find your own research routine, according to the time that you have, your personality and your best work-trade-life balance. What’s more, when you’ve seen the pros and cons of the other side of the coin, you’ll also find adapting to that other approach – if needed – much easier.

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Off we go with the PROS of doing your research in the evenings:

  1. Analyze This

Once you’ve finished trading for the day, rested, watched the football game or caught up on the latest Game of Thrones death, sitting comfortably in your home and analyzing how your trading day went feels priceless, doesn’t it? That’s because you’re getting the bigger picture of what happened throughout the day, what moved the market, which penny-stock company went bankrupt and what went wrong (or just right) with your trading tactics. You’ll also find evenings useful for research because they keep your:

  1. Distractions Away

In the evening hours, no one is bothering you with ‘check my homework/fix my bicycle/did you remember to get the milk.’  You should have at least an hour or so, before going to bed, all to yourself.  So, take advantage of it to make a list of which stocks you’ll check out and possibly trade the next day. Distractions removed, you’ll be able to concentrate on analyzing some internet chatter or pump scheme that you might have missed during the hectic trading day. And, freed of distractions, you’ll have:

  1. All This Time

To delve into market trends and movers.  You’ll be able to catch up on an after-market-closure company press releases that are bound to move the stock the next day. But, here’s one red flag for you: you may be tempted to put in all of the work now, so you don’t have to bother with it tomorrow.  But, you shouldn’t stay up too much past your usual bed time.  It’s easy to get lost in research.

Because — and here we are now looking at the other side of the evening-research-coin — if you think it’s already too late, just leave the research for the morning. And we’ll list for you now:

The CONS of doing evening research:

  1. Losing Track of Time

If you have a one hour time slot to do research, that’s perfectly okay. A friendly reminder, though: be careful not to lose track of time and put off your usual “turning in” time for the night. Going to bed in the wee hours (if you’re used to, say, an 11pm-bed-time) may not help you rise and shine early, the next morning, for your trader, or regular job. Also, do yourself a favor and avoid:

  1. Overwork

If you haven’t taken at least an hour off from all things trading during the day, overwork in analyzing entry points in the evening is liable to do you more harm than good.  Studies say so.  Overwork has negative effects on you health and may cause sleep disorders or depressive symptoms. Research has also found a link between overwork and heart disease. If you haven’t had the time to shake off a hectic day of shorting stocks, then indulge in eating out or playing with the kids ( or teaching your kids to trade stocks), rather than in over-analyzing the trading day. That said, our next tick on the evening cons-list is:

  1. Not Enough Family Time

Are you sure you want to ignore your loved one, or miss out on tucking the kids in or miss a family dinner or your best pal’s birthday party, because you had to check how’s the market been doing? Probably not. You may just want to leave your research for the morning, before the markets open.

And here are our PROS of doing research before markets open:

 1. New Day, New Way

Apart from the obvious health benefits, a good night’s sleep will help you look at the new day in a more positive light. Did you know that research suggests that people with happier thoughts on their minds tend to work more creatively to find solutions to complex problems or situations? Now you do. Mornings are also great to:

  1. Start Over

And review which of your trades went right and which went, well, not so right. A more positive attitude and level-headed approach to analyzing the market will help you to make more rational decisions about which stocks to short and which stocks to take long. Speaking of today, mornings are just perfect to get to the:

  1. Most Recent Market Updates

This will allow you to find out what happened overnight in other time zones. Did the Chinese stock market crash again, dragging all of the markets across Europe into deep red? Is there panic-selling that you should steer clear of (or take advantage of)? The research before markets open will give you the most recent info to kick off the trading day.

  1.  Early-Bird Gets the Worm

With high market volatility in the opening minutes, there is a rare opportunity here to get in and get out or to get in, get out, get in again and out again—whatever the volume of trading allows.  Of course, higher volume trading assures that you can dump your shares if you need to and this may not always be possible during slower market times.  According to the Wall Street Journal, this is the most dangerous time of day to trade. Indeed, that may be so, but it may also be the most lucrative.

With this tip we’ve reached your list of:

The CONS of doing research before markets open:

One drawback of the morning market research is that it may eat up part of your morning routine time and you may have to

  1. Rush

To be on time. The morning rush may increase your stress levels, which is not helping your trading tactics at the start of the day or your body and mind. Rushing and stress will also increase your anxiety and sow the nasty seeds of negative thoughts, as early in the day as in the morning. Doesn’t sound good, does it? It’s also no good for the:

  1. ‘Owls’ in The Morning

Racing against time is also totally counterproductive to any morning activity – let alone research of the markets.  If you’re the stay-up-late, kind of person who feels better and more productive in the evenings, rather than in the mornings. So, if you think that getting out of bed before 8am is a deal-breaker and the hours before that are an absolutely ghastly time for a person to be awake, well, maybe analyzing the markets before opening is not a good idea. In this case, we reckon chances are pretty high that you did your homework the previous evening. Right?

And this concludes our take of the pros and cons of both approaches to doing your research. We’ve just pointed out some things and delivered a few tips for you. It’s entirely up to you to find your own perfect time for doing your research.  Maybe, you could even split it between evenings and mornings? Because, when it comes to trading, you are your own boss.