There are several things that you do need to watch when you trade stocks. You watch the movement of the stock, the high price for the day, the low and the volume. This stock market information gives the short-term trader enough information to find a stock to trade.
The movement of the stock is the fluctuation in price. Sometimes the stock goes up for no apparent reason. Short term investors are considered speculators. Speculators may drive the price up on a rumor or by watching the cyclical movement of the stock, and guess when it’s at the lowest point to buy. Investors that purchase for long 홀덤 term investments investigate the company, their financials and based on the business plan and management team chose a stock. Neither type of investing is right or wrong, they just have different agendas.
One method of short term, speculative investing is the day trader. These are speculators that purchase the stock when they feel the price is the low for the day and sell, usually before the end of the day when it hits a specific percentage above their purchase price. Somewhere between long term buy and hold and day traders are the vast majority of investors.
Volume is the second important factor for you to watch when you purchase a stock. Volume tells you the number of shares that were exchanged that particular day. Investors watch volume to see if interest increased in a stock, either positively or negatively. They also evaluate whether the stock is frequently traded. A stock that shows low volume trading sometimes is difficult to sell.
Armed with the information on volume and market movement, many individuals make their first stock trade. Others buy the product, check out the company, read about the stock and then compare the financials and stock movement with other similar companies before they buy.
When you watch the high and low for the day, if you are a short term investor, you glean enough stock market information on that stock to set the price for a buy and sell of the stock. Short term traders look for reoccurring patterns with variation between the high and low that are large enough for a profitable full cycle trade, a buy and a sell. The short term trader hopes that his information is a consistent pattern that reoccurs on the day he trades. If the trader finds that the pattern is a longer period than one day, but a weekly cycle, he plans to hold the stock until it reaches it’s peak.