by Das Brain
In this post called ”When To Buy A Stock or Option – Market Timing – Part 3″, I am going to mainly focus on short-term trading, as in Part 1 and Part 2 the subject of long-term and intermediate term timing was covered.
One thing to note, that the reference to “timing” here is a indication of entering a “long position” or buying a stock or option in anticipation the price would go up.
Timing for short-term trading is much more difficult. The difficulty increases as the time-frame is shortened. In light of this fact, day trading (intraday) would be a lot more difficult to time, than swing trading where you have several day to buy and sell, as opposed to one single trading day to buy and sell.
For both of day and swing trading though, you would really need to study the charts for the stocks you want to get in to. Here is where “technical analysis” is very very important as it will tell you when the best time to get in to a stock woudl be. If you want to trade in the short-term without technical analysis you are basically flying blind.
Using technical analysis in the short-term you will generally buy in to a stock, when certain oscillator indicators are in oversold areas and begins to move up crossing a lower line, indicators such as “fast stochastics”. In addition, other trend indicators such crossing “moving averages” and “MACD” indicators should used to confirm a buy signal before stock prices begin to move up. See the chart below.
If you plan to short-term trade I would recommend that you either take courses or do extensive reading up on the subject of technical analysis.
Buy Technical Analysis E-books up to 75% off at ReadLearnTrade.com
One highly recommended book on this subject, Toni Turners “Beginners Guide To Short-Term Trading” which does a wonderful job teaching the beginner every aspect of trading in the short-term. Although it’s a great book, you will have actually have to trade, and read more books before you become familiar with the concepts of trading.
I will be posting some of my technical analysis notes in future articles, please check the “Technical Analysis” category going forward.
Â
Bookmark at:StumbleUpon | Digg | Del.icio.us | Dzone | Newsvine | Spurl | Simpy | Furl | Reddit | Yahoo! MyWeb
