Want to trade better – read these five pieces of wisdom about trading and win.
Do you need any suggestion about stock trading? In this post, I will give stock trading tips and tricks.
1) Never Place Your Market Orders Prior To The Trading Day Opening:
Market orders are those without a specified sell or buy price. Yet, strange happenings can occur once the opening bell rings, so you might wind up paying a lot more than you planned when buying. Likewise, the sell side might mean you get a lot less than you wanted. Market orders always carry this risk, this risk is at its highest in the opening hours, when orders start piling up from various traders who are reacting to the news of the morning, or even from the previous evening. If you have to do opening hours trades, use a limit order to enjoy some protection.
2) If You Want To Trade ‘With The Market’, Do So From 1:00 Until 2:30 P.M. EST:
At this time the entire continental United States has gone to work, even on the Pacific Coast, so everyone’s had their chance to learn and digest the news of the day. Mornings are when most government statistics or corporate earnings reports get released, so market-shaking news has already happened.
3) Prior To Putting In Any Sell Or Buy Order, Check Both The Ask Size And Bid Size For An Exchange-Listed Stock:
A real-time quote system that has any benefit to you isn’t just going to let you know what a stock’s last price was, but also the asking price, the bid price, and how many shares are being offered or bid for at both of those prices. You should also set up stock alerts. When a bid size is bigger than the ask, it’s symptomatic of an underlying demand for that particular stock, so don’t wait much longer if you’re intending to buy it. On the other hand, a larger ask-side position signals many sellers looking to get out. If you were planning on selling, again, don’t wait. Are you wondering what happens if bid and ask sizes prove nearly equal? Those are circumstances ideal for entering limit orders nearly halfway between the two prices. Odds are good your order gets executed straight down the middle.
4) The 18th To The 22nd Of Any Month Is Prime Time For Buying Stocks:
This time of the month is when cash flows going into the market, from sources like dividend reinvestment and pension funds, tend to hit their low tide. Prices follow suit. Likewise, the best time each month to sell is the first two days of the month and the last two months. It’s also good to buy aggressively during September and October, as the market seems to have a strong tendency to bottom out in this season. On the other hand, April and the early parts of May are ideal for selling.
5) Most Of The Time, Buy Stocks Trading Higher Than $10 Per Share:
Two reasons stand behind this advice. First of all, stocks trading under that level typically get quoted at bigger percentage spreads between the buying and selling prices, meaning you have to have a larger price increase just to break even. Secondly, companies featuring lower-priced stocks are more susceptible to financial turbulence, such as bankruptcy. Closed-end funds can be an exception, as some managers go for low trading prices to make their share prices welcoming to smaller investors. Still, as a general rule of thumb, stocks under ten bucks have the deck stacked against them. It’s better to buy ten shares of a $20 stock than forty shares of a $5 stock.