This morning during my Premarket Prep, I brought up something a lot of new traders don’t want to hear.
It’s something a lot of seasoned traders like myself agree on…
And that is that as a new trader, your job is not to make money…Yes, I’m serious.
Your job is to learn risk management, create a trading plan, paper trade your strategies, and build your discipline.
And yes, you’ll miss a lot of trades by doing this and you’ll probably be really frustrated and aggravated with the whole process.
But I preach this because 90% of new traders fail. They fail because they don’t do any of the above.
Instead, they dive into the market headfirst, trade aggressively, chase after every shiny new object, trade premarket, trade in after hours, and make 50 trades a day.
I know, I’ve said it over and over again, and I’ll keep saying it…
My job is to keep you alive so you can come back the next day, grow your account, and eventually have enough capital to take advantage of all of the incredible opportunities out there.
The best way to survive is to follow my 9:45 am rule.
Every new trader is eager to make money…I know I was when I first started out.
You want to be the next big success story—make a hundred bucks, a thousand, even a million.
But when you’re starting out, the biggest key to staying in the game is actually doing less. It’s about defense, not offense.
A lot of new traders have the wrong mindset and think the more they do, the better they’ll get. But that’s a mistake.
In trading, especially early on, more is often worse. You end up overtrading, taking too many losses, and not having a clear idea of what’s working and what’s not. You need to track your data and refine your strategy.
The 9:45 rule keeps you out of trouble by helping you avoid getting caught up in early morning volatility.
Table of Contents
What Is the 9:45 am Rule?
There’s so much unnecessary noise out there and it’s only getting worse, especially with the influence of chat rooms and Reddit pumps.
With all of that, stocks often spike between 9:00 and the open at 9:30, only to crash immediately after.
Newbies see the hype, get FOMO, buy in pre-market, and then—bam!—the bottom falls out.
Waiting until 9:45 gives you time to let that early action play out, so you don’t get caught holding the bag.
To be clear, I say 9:45 a.m., but that’s not a hard and fast rule. In fact, it’s a window between something like 9:40 and 10:00, as long as you’re not trading at 9:30. The point is to wait until after the market opens and the dust settles before jumping in.
Why Wait?
So, why 9:45? What’s the method to my madness?
Even if a trade idea is good, if you jump in too early, you’re likely to get shaken out. Waiting for a volume spike and other confirmations gives you better chances for success.
More time also gives you a clearer stop-loss level, like VWAP.
Take a look at the chart from yesterday for GlycoMimetics Inc. (NASDAQ: GLYC). See how the stock rode up premarket? But by 9:25, GLYC started its quick tumble and was trading below VWAP.
By waiting until 9:45 or even earlier, you could have avoided entering this trade and taking a loss. At that point, you had all the information you needed to tell you GLYC would fail.
GLYC Intraday, One-Minute Candles Chart; SteadyTrade.
How to Trade Using the Rule
The rule works for good trades too. For example, say GLYC kept running up even after 9:30. If, by 9:45, it was still on that trajectory, above VWAP, and had a spike in volume, you’re much better informed about whether that trade will play out successfully.
Remember, it’s not about guaranteeing a win at 9:45. No strategy is foolproof. But by waiting until 9:45, you increase your odds of entering a successful trade.
So, focus on entering trades around 9:45, using VWAP as a guide for your exits, and applying a disciplined risk-reward approach.
To apply the 9:45 rule, you’ll need a robust trading platform with charting, technical indicators like VWAP, stock screening, and more.
StocksToTrade covers all the bases and it’s my top pick. It also has a selection of add-on alerts services, so you can stay ahead of the curve.
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My Final Thoughts…
The 9:45 rule makes sure you don’t get trapped in a bad trade.
Waiting until 9:45 can often prevent getting swept up in the early morning chaos. That’s when people who got in early become bag holders.
Sometimes, the best trade is no trade at all. Staying flat is a win if the alternative is taking a massive loss that takes you weeks to recover from, or even wipes out your account. When stocks like GLYC fail to hold those pre-market gains and start fading, you’ll be glad you stayed disciplined.
Bottom line: Be cautious. Avoid the FOMO. If a trade isn’t right, it’s better to wait than to gamble. The 9:45 rule is your friend.
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Have a great weekend, everyone. Don’t forget to watch out for my 5-Stock Weekly Watchlist coming to your inbox on Sunday!
Tim Bohen
Lead Trainer, StocksToTrade