Skip to main content
All CollectionsStrategy
Why We Don’t Trade Power Hour
Why We Don’t Trade Power Hour

Learn why we recommend caution during power hour, especially for newer traders.

Matt Peters avatar
Written by Matt Peters
Updated over 2 weeks ago

Introduction

Power hour, the final hour of the trading day (3:00 PM – 4:00 PM EST), is known for its heightened activity and volatility. While this time period can present opportunities, it’s not the ideal trading environment for most BigShort users, particularly those newer to the platform or trading in general. Here’s why we advise caution during power hour and why our proprietary indicators may not perform as effectively in this time frame.
​

Why Power Hour Is Unique

Institutional Influence

During power hour, large institutional investors and funds dominate the market as they adjust their positions for the day’s close. The sheer volume and scale of their trades can drastically alter market dynamics. These trades often override earlier trends or signals, rendering many retail trading strategies ineffective.

Volatility and Unpredictability

The influx of institutional money creates a tsunami effect, where smaller trades—including those based on our indicators—become drops in the ocean. The volatility during power hour can lead to sharp price movements that are difficult to predict and navigate.

Dynamic Shifts

Indicators like those used in BigShort rely on patterns, momentum, and mean reversion. These metrics are influenced by typical trading behavior throughout the day. However, during power hour, the rules shift. The heavy institutional activity disrupts these patterns, making it challenging for indicators to provide reliable insights.
​


Advice for BigShort Users

  • Avoid Power Hour Unless Experienced: We recommend that most users, especially those newer to trading or BigShort, avoid trading during power hour altogether.

  • Exercise Extreme Caution: If you choose to trade during power hour, understand that the environment is highly volatile. Prepare for the possibility of rapid, unexpected price swings.

  • Stay Informed: Experienced traders who opt to trade during this time should consider additional context beyond BigShort’s indicators, such as market news, institutional trading patterns, and broader market conditions.
    ​

💡 Tip: Stay smart. Trade safe. And remember: sometimes the best trade is no trade at all.

Did this answer your question?