Who Opens the Market? Amateurs or Professionals? #stockmarket #sharemarkettips #intradaytrading

Many traders believe "Amateurs open the market and Professionals close the market"

But the reality is completely different.

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The statement "Amateurs open the market and professionals close the market" is a common saying in stock markets globally, implying that retail investors are more active at the opening while institutional investors, like mutual funds and professional traders, make their moves towards the market close. However, this assertion does not hold strictly true, especially in the context of Indian markets, for several reasons:

Increased Retail Participation Throughout the Day: With the advent of technology and mobile trading apps, retail investors in India have the flexibility to trade throughout the trading session, not just at the opening. This means their impact is felt continuously, not just at the start.

Institutional Activity Throughout the Day: Institutional investors, including foreign institutional investors (FIIs) and domestic institutional investors (DIIs), engage in trading activities throughout the day based on sophisticated algorithms and strategies. Their actions are not limited to the closing hours but are spread out to take advantage of market conditions as they develop.

Pre-Open Session Influence: The Indian market has a pre-open session where both retail and institutional investors can place orders. This session helps in determining the opening price of securities, indicating that professionals also play a significant role at the market's opening, contradicting the idea that they are only active towards the close.

Impact of Global Markets: The Indian stock market is significantly influenced by global events and markets. Institutional investors, aware of global market trends, might choose to trade at any time of the day, based on international market movements, rather than waiting for the market to close.

High Frequency and Algorithmic Trading: Both retail and professional traders increasingly use high-frequency trading (HFT) and algorithmic trading strategies that do not confine their activity to any specific part of the trading day. These strategies can execute trades within milliseconds, throughout the trading session, based on pre-set criteria rather than the time of day.


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