what is power hour in trading?

Power hour is a term used in the stock market, and it refers to the closing hours of stock exchanges which is from 3 pm till 4 pm American time.

3 pm - 4 pm is regarded as the power hour because there is more buying/selling that takes place as market participants struggle to close their positions & open overnight positions before the stock exchanges close for the day.

Remember that investors/traders usually pay special attention to the closing price of an asset so once the stock exchange is about to close market participants will try to estimate what the possible closing price of an asset will be and execute overnight orders to take advantage of the possible closing price.

Another reason why the power hour is important is that most economic news/data is released in the afternoon so investors/traders will take an hour or two to digest this news then open trades based on this news during the power hour.

It is basically the last hour of business before an exchange closes for the day. The power hour is even more important on the last Friday of the month when portfolio managers are rushing to rebalance their portfolio before business closes. You could see portfolio managers sell lots off shares causing the dollar to strengthen and vice versa, during the power hour.

The power hour for the forex market is 4 pm UTC when the London session is preparing to close.

Power hour refers to the most active and volatile time in the market when price movements are usually the strongest. It’s when trading volume spikes, meaning more buyers and sellers are in the market .

This happens when two forex session overlap .