what's a good strategy when buying and selling stocks?

Question

what is something that you have tried. My strategy is setting a limit price for a stock that fluctuates regularly, and basically buy it when its low and set another limit price to sell it when it increases but right before it reaches its maximum. Any suggestions? and please tell me if my idea sucks and why

Answer 1

Buy stocks that have made substantial moves on high volume and have continue to move upward since then. Place a stoploss around 7-8% below your purchase price and move it up cautiously but less closely, as you begin to see a net profit. Continue trailing your stoploss as the stock advances, and let it decide when the time is right to sell. If you do get stopped out, take a breather to evaluate whether you misjudged that particular stock before deciding whether to buy it back or look elsewhere.

Answer 2

1

Answer 3

Using charts to find resistance and support is one of the most basic ways to find good entry and exit points. You're doing that without the tools. You'll find learning basic charting will greatly improve your performance.

Keep in mind most professional traders look at buying of a stock as only 10% of what makes a trader successful.

The most important (60%);
Market trend/direction.

Other important things are;
Placing a proper stop.
Always having an exit stradegy.
Get out if trade is going against you.
Have a full plan before entering the market.

You're on the right path.

Read as many books as possible.
Some good ones include;
The Disiplined Trader
High Probability Trading
Trade Your Way To Financial Freedom
Trading For A Living.

Answer 4

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Answer 5

Your Strategy of setting a limit price for a stock that fluctuates regularly, and basically buy it when its low and set another limit price to sell it when it increases but right before it reaches its maximum is:

only good if:
A) you can predict the highs and lows for the stock
B) you profit enough from the trade to justify the taxes and capital gains expense
C) you account for commision, which depends on the Brokerage house

otherwise it sucks, and here is why: Buy and Hold, in general does better than random trading.

Answer 6

I don´t subscribe to day trading, its just to risky. I buy companies who have been around but have come down for whatever reason, but still have their fundamentals in place. I am carefully watching financials waiting for that buy opportunity. Those will do great in the coming years, we will always have banks, and banks are in the business of making money. A good strategy is to buy companies that are undervalued and hold for the long term. THere are no get rich quick schemes in the market, too much emotion with day trading. If you buy a company based on good fundamentals, you know you will never sell, even when everyone else is.

Answer 7

I'd second Jerry M on the strategy and Spock and Common Sense on everything else.

You may also want to consider joining:

http://finance.groups.yahoo.com/group/TradingZoom/

- a free stock picking group on Yahoo - to bounce your trading ideas off other experienced traders.

Answer 8

that is called the 'rolling stocks' method and has been hyped to death by an ungodly number of hucksters, some of whom were actually convicted of various crimes. The one I recall outright lied about his success rate and track record -- he was losing nearly as much in the markets as his victims were paying for his 'method'.

there is no fixed method for making profits in stocks. or in anything else that trades. if there were, someone would sell it to hundreds of thousands of traders and it would stop working because everyone would be following it.

learning, study, and work might result in you developing a series of methods, some of which work some of the the time. If you then understand when the time is right for any particular method and play only that method at that time, you'll do ok.

one of the people I try to learn from used to start his intro seminars by reporting that 49 of 50 new traders exit the markets within 2 years after having lost some, all, or more than all of their capital.

the markets are filled with pros ... all of whom are trying to take as much of your money every day as you'll let them.


it is learn or lose.

Answer 9

I'm making big money with binary option, I use this software ( http://forexsignal.kyma.info ) My software delivers signals only when the five indicators (bp trend filter, market deviation, price pattern, rel. price impulse, stat. price range) are aligned together and we have an extremely high confidence rate, it must then co-exist with my proven secret strategy before a trade be detected… as a result, we get a guaranteed Highly-Accurate ’80-100%’ Signal.

Answer 10

You're idea is a good start, but you need to incorperate valuation into it as well. In otherwords, you have to find and buy stock in companies that have real intrinsic value and are underpriced. See http://en.wikipedia.org/wiki/Value_investing