How to Know When to Buy and Sell Stocks
Day trading is not exactly an easy pastime or profession. Traders – especially beginners – experience frustration from losses or confusion from all the techniques and information available. Many types of investments are available including stocks, commodities, currencies, and more. Combine that with the choices of buying options or futures, exercising limit orders and stop loss orders, selection of the right online broker, and fee comparisons, and you have the makings of a real dilemma in making the right decisions at the right time.
With all the variations in financial decisions and trade execution how is a trader to know when to buy or sell a stock?
When to Buy
First decide what markets you want to participate in that match your trading strategy. If you’ve already decided to avoid certain markets such as energy or pharmaceuticals there was probably a valid reason for that decision. Stick with your strategy. If manufacturing stocks are your interest and what you feel comfortable with you should focus on those markets or trades on closely-related businesses. Wise investors have often guided traders to “invest in what you know”.
Find an online broker with the tools that help you track performance, news, and charts that are meaningful to you. Take time to understand what charts and stock tickers mean to traders.
Do research – if you have identified a stock that piques your interest take a little time to research their earnings history, market trends, and even their management team. If all the pieces fit together and the planets align that meet your criteria, it’s time to buy.
Monitor news events – mergers and acquisitions (M&A) can send stocks up or down depending on the purpose of the action. Getting in on the volatility early can be rewarding in a very short time span.
Set your price point. Analysts often announce their predictions of stock price performance and traders can also perform their own analysis of what their price expectations are. When the stock gets to that point, press the “buy” button and watch the profits roll in.
When to Sell
Similar to your price point for buying a stock, determine in advance what your sell point will be. This includes not only a high point that you’ve determined would be a good point to lock in your gains, but also a low point that you select for cutting your losses in the event your investment doesn’t work out. They won’t all work to your advantage. That’s the nature of day trading making an exit point critical to avoid financial disaster.
News of a pending negative earnings report means it’s a good time to shed that trade before common knowledge of the announcement degrades the stock value.
Watch your charts. Moving averages that take a downturn could likely indicate a quick investor response triggering a downturn. Get out with as much profit (or the least loss) as you can.
Seasonal trends can impact your buy and sell decisions. If you get in on a stock as the company’s seasonal earnings are climbing you can enjoy appreciating stock value. As the end of the season approaches it may behoove you to sell while the stock is still at a reasonably high price and before any downturn.
Once You Know When to Buy and Sell Stocks
Now that you have the knowledge that identifies the right time to buy and sell stocks all you need are software tools and a reliable, cost-effective online broker to execute your trades.
SureTrader’s online broker services and analytical tools enable you to monitor your stock of interest for the right time to execute your orders to provide the highest potential for gains. Online broker SureTrader is there with friendly and courteous support unmatched by other brokers and is available to all clients 24×7 to answer questions and to resolve any problems.
Use your Android or iOS phone or tablet, laptop, or desktop computer to leverage real-time trade information to your advantage in making the trades that meet your strategy quickly and easily. SureTrader is there for you with the option to trade in off-hours markets from anywhere at the time that’s most convenient for you.
Contact SureTrader right away to get started doing trading with the best in online brokers.
Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.