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I have been taking a closer look at timing
particularly when entering the the stock market and also on leaving, but more on
that later.
Timing
very much depends on what sort of trader you are .For a day trader timing is
crucial as there are only the hours available that the market is open
today.They very rarely hold any stock positions overnight.
Usually
the day traders enter the market around 45 minutes after the initial flurry of
orders has gone through. The majority of these trades having been set prior to
opening or from the night before by less experienced traders "who must get
in at all costs".Once the direction of the particular stock has been set,
Day traders move in. Usually profits are taken on very little movements.The
speculative stocks are very popular for as just a 1cent movement can mean a
quick 10 to 20% profit.
An hour
before closing of trading will also see a flurry of activity as the Day traders
exit their positions for the day,very rarely hanging on overnight.
To the
next type of trader timing is still important but not to the same extent as the
Day trader.Their timing duration is more often 2 to 4 days.This depends on the
momentum and volatility of the stock involved.
The last
trader is more for the medium to long term invsetments, where timing matters
very little.The daily fluctuations in price mean very little to this trader as
they by experience know that share price drops are transitory and will
eventually continue to rise again.Their type of stocks are usually the rock
solid Blue Chips which will eventually weather the storm and continue being
profitable once more.
Timing
plays a important factor when you have decided to leave the market either
taking a profit or minimising a loss or breaking even.
Of course
the most opportune time to leave the market is when you have reached your
preset profit goal and of course you stuck to it didn't you?
I have
learnt that if I hold on too long, trying for the maximum profit possible that
I quite often don't make as much profit as I should of, because the share price
plunged downwards because other traders took their profits causing the share
price to drop drastically.
Nobody
can time the bottom or the top of the market and if you do well then count
yourself lucky.I myself still try to time it right but rarely succeed.
I am a
great advocate on buying in gloom and sell in boom. When the market goes down
for what ever reason, I take more interest in what good quality stocks have
been affected and try to buy in at the lowest price possible.As they invariably
recover again I am out again as soon as my preset profit is reached.
I try not
to get too attached to stocks and try to see them only as a vehicle to make
money.
And
that's what it is all about after all isn't it?
Strudy is a keen successful share trader on the
Australian Stock Market. Visit his weblogs for more free articles and useful
information at both http://www.asxnewbie.com
and http://www.aussiewealthreview.com
you will glad you took the time to do so.
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