When To Buy And Sell A Stock
One of the biggest questions I get asked is, “How to tell when to buy and sell a stock?“. The answer is not too simple to explain. Reason why is because there are hundreds of ways to tell. Each way has it’s own specific purpose.
For example, suppose you owned a stock because of it’s high dividend yield. Income you need to live on. You should probably sell if they were to cut their dividend. Someone else may own this stock for a different reason and their sell point would be different.
So let me try to break it all down so no matter what reason you are reading this, you should find it of some help.
There are two ways to analyze a stock for buying or selling. Fundamental versus Technical. The one you use will depend on your trading style.
It would take a person a lifetime to be an expert in both methods, so I suggest you learn one and be good at it.
Decide if you will be a long term investor or a trader who invests only for the short term. Your objectives are different, thus your entry and exit points will differ.
If you decide you want to be a long term investor, then I recommend you study and learn about “Fundamental Analysis”. Warren Buffett made his fortune with this. Fundamental analysis involves studying a companies financial sheets, their products, their management, and so much more.
If you plan to trade for the short term (trade every couple weeks or months), I would recommend using “Technical Anaysis”. This is the method most all traders use for short term trading of the markets. It involves looking at a chart of a stock and picking the buy and sell points based on patterns that repeat in the chart.
Personally I am a trader. Therfore I specialze in Technical Analysis.
Whether you are an investor or a trader, here is an important article I wrote that shows how to determine your sell price on the downside.
There is one more way you can find when to buy and sell a stock that requires no long hours of study, and no need for fundamental or technical analysis. It’s the easiest way to get started fast, and that’s to subscribe to my Index Trading Strategy. I’ll tell you exactly when to buy and when to sell. All you need do is read an email and push a button to make a trade.