The Basic Principles Of Buying And Selling Stock

by David Jenyns on October 16, 2009

Stock basics say that ideally, you buy stock at its lowest price and sell at its highest. Timing your stock transactions, therefore, is perhaps the most delicate element of investment, the decision requiring the keenest judgment and the surest touch.


The surest way to miss tops or bottoms is to wait for that last extra point of gain, that one more point of drop. Buying near or at the top is a temptation when a stock has been rising swiftly and steadily and the investor is eager to get aboard.

A close study of the history of the stock market and individual stocks that have risen and fallen can be informative, but as always there is no magic bullet.

Since judgment is a subjective quality, there are no firm rules for applying it. But there are stock basics that can begin to define objectives and delimit areas of choice. And there are a number of techniques that attempt, more or less successfully, to better the average results obtained from trying to calculate timing arbitrarily.

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