How To Do Just About Everything
By eHow Personal Finance Editor
Rate: (8 Ratings)
Knowing when to buy stocks can be a challenging task. Following a few simple steps can make the process easier.
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Comments
infoseeker said
on 12/22/2007 economical news ,fed action, price of oil a lot of factors my affect the time to buy or sell,technical indicators like %R/onbalance volume/fast stoshastics/chaikin volatility just a few indicators that will help in ur decision happy huntng.
WizeTrade said
on 11/30/2007 I disagree. With today's technology you can use software to get all the information you need. Wize Trade is the first ever red-light green-light stock trading software to hit the market. Long gone are the days of reading 50 stock charts. Wize Trade tells exactly when to get in and get out of a trade. This precision can not be found in any other program.
question said
on 1/2/2007 I have recently had a chance of using a Personal Finance Software package by Australian business Parcus Group - Personal Finance Associate.
The product is very good. For the AU$29 it costs, you get budgeting, financial planning templates as well as advanced features that typically cost loads more as separate software packages such as investment real estate calculations (mainly based on rental cash-flow analysis) as well as some value based shares valuations (based on Warren Buffet's stock valuation methodology)
Their website is www.parcusgroup.com
For anyone interested in their own wealth creation (via shares or else) this product is definitely worth looking at.
Anonymous said
on 11/22/2005 There are remarkable powers in observation. In the old days, traders would watch the tape, learning from the price action which stocks to buy. Other investors today study charts and use sophisticated computer programs to screen investments.
I believe the when of buying stocks can be much simpler.
When building a portfolio, I like to believe an investor can start out in a neutral position, that is half-way invested, and half-way in cash and equivalents. First determine your maximum number of stocks to own. I like to own 25 positions. I would think 20 would be a nice number. Diversification avoids implosions and disasters by any individual company.
Consider a 25% equity position your minimal conservative position and 100% invested your maximum. That is, drop down to five positions if you hit sell points, and do not exceed twenty. O.K., when should you buy?
For me, I consider a buy signal when either I am at the minimum number of stocks and when one of these are sold regardless of my portfolio action or market activity. Otherwise, if I am below the maximum number of positions, I use a sale of a portion of my holdings at a gain as a signal that the market and my approach is conducive to expansion of my portfolio and transferring assets from cash into the market.
I have my own system of stock "picking" that I discuss on my blog, Stock Picks Bob's Advice. But I do not "pick" a stock for an actual investment unless my portfolio gives me the appropriate signal!
It is important to sell your poorly performing stocks quickly, and your nicely performing stocks slowly. That strategy alone will give you a profitable portfolio over the long haul. I use sale points at gains based on stock price appreciation. I sell 1/4 of my holdings in a stock when they hit the following gain targets: 30%, 60%, 90%, 120%,...then by 60% intervals x4, then 90% intervals x 4, etc. These sales on gains are also used as signals to "entitle" me to add a position if I am under my maximum number of holdings.
On the downside, I sell a position if I incur an 8% or greater loss after a first purchase, if I have sold once at a gain, I allow it to decline to break-even before unloading it, otherwise at higher sale points, for example if I sold at a 90% gain 1/4 of my holdings, I will let the stock drift back 50% of the distance to a 45% gain and unload the shares!
If you have any questions, please drop by my blog and you will see what I do in practice! The URL: http://bobsadviceforstocks.tripod.com/bobsadviceforstocks/
P.S. I am an amateur investor, so please consult with your professional investment advisors prior to making any investment decisions!
Anonymous said
on 11/22/2005 Day trading is a very competitive field and in order to succeed you need to focus on a set of simple strategies that you can implement without hesitation. This game is all about buying and selling according to your set ups. So the clearer your set ups are, the faster you can make a profitable decision. Hopefully some sites on the web do offer more relevant and updated day trading information. One of those sites that can show you how to trade using a practical strategy is Practical Day Trading (PracticalDayTrading.com). They focus mainly on short term momentum stock trading strategies, that in my opinion are easier to implement than many other technical systems out there.
Day trading doesn't have to be complicated as many people perceive. But you do need to follow a well organized set of rules and tactics, that once you master them, you can aspire to replicate profitable trades with consistency.