Friday, April 26, 2013

Three Steps To Properly Time Your Stock Trades

Three Steps To Properly Time Your Stock Trades
By [http://ezinearticles.com/?expert=Timothy_R_Fletcher]Timothy R Fletcher

We have all done it at least once.
We hear or read in the news about a company with a promising future.
We become immediately convinced that we must buy now or we will miss out.

Making hasty, emotional decisions when purchasing stocks is dangerous.
This is especially true for new traders who may be working with a modest initial balance in their new stock trading account. When you get caught chasing after prices and a stock you purchased falls dramatically, you either take losses or wait and wait and wait for the price to rise again.
A disciplined stock buying strategy can protect you from emotional quick decisions.
Instead of searching and hoping for the next big winner, here is a strategy that can find bargain prices for good stocks and stop you from paying too much.

Step one:
Do your homework and identify six or eight, maybe up to a dozen companies that have a promising future, but whose stock price is less than one dollar.
I'm not suggesting that you become a "penny-stock player." I am suggesting that you identify low-priced stocks of promising companies because these are opportunities to build large positions quickly.
Generally, these are going to be companies that are in the development stage or perhaps newly started companies.
Determine that their product or service is sound and that there is a strong management team in place.

Step two:
Identify each stock's "channel" or "range."
Take a look at the stock's one year price chart. Over the last few months, is the stock's price fluctuating between five cents and $.10 per share?
You don't have to be a chart technician to recognize a stock's average range.

Step three:
If it is consistently moving up and down in a range or channel, simply place a "limit-buy order" equal to the bottom of the range or channel and wait!

This takes discipline, but it keeps you from chasing after rising prices. Yes, from time to time a stock will take off higher and you will "miss the boat" because of this strategy.

More times than not, however, this strategy will keep you rational and help you wait for the pullback that almost always follows sharp price spikes.

This is merely one strategy for timing your stock trades.
This is, however, an excellent strategy for the new stock trader. As you become more experienced, you will find many other strategies that accomplish the same thing in different market conditions.
For now, identify good stocks to accumulate. Get a feel for the price range. Then place limit-buy orders and wait for the price to "come to you."
Timothy Randolph Fletcher is the Managing Editor of the NDW TREND TRADING REPORT. It is a monthly publication that provides research, analysis, and specific stock choices for traders. The company also provides a QUICK-START GUIDE TO STOCK TRADING for those who are considering stock trading for profits. Click here for a free copy!

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Article Source: [http://EzineArticles.com/?Three-Steps-To-Properly-Time-Your-Stock-Trades&id=7668374] Three Steps To Properly Time Your Stock Trades

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