Know When to Buy and Sell Stocks
There are many different strategies to use when you invest in or trade stocks. It is important that you have a strategy to stick with it. It does not matter whether you are a short or long-term investor – discipline is the key to success after you invest in stocks. You also need to understand that there is no perfect system. Any system you use has its limitations, but at least if you have a system, you have a set of rules to know when to buy and sell
I often use systems that know when to buy and sell stocks based on 3 rules , Making the task of buying stocks easy to use and understand.
The three rules of the system are:
It is important to buy stocks when buying stocks. This is a stock that you can easily sell when you need it. To do this, you need to ensure that there is a good consistent volume. Many investors will only trade by volume, especially for smaller stocks, as market announcements tend to increase trading volume.
You need a chart to apply this rule. All you need is to apply a long-term average to the scale. If you are a short-term trader, then applying the 100-day average is a good indicator. The rule is to buy only when the price is above the 100-day moving average.
To apply this rule, you need a bar chart showing daily open and close prices. The greatness of a bar chart is the information contained in each bar. The daily bar will have a high and low bar representing high and low prices reached during the day trade. It also contains two horizontal dashes, one on the left representing the opening price and one on the right representing the closing price
The rule applied here is that only three consecutive bar graphs show higher "low". Low is the bottom of the bar, not the lower horizontal bar or the closing price. What we are looking for here is just an up-trend buying. The number of consecutive days can be changed to your preference, but 3 days have also been successfully used by Nicolas Darvis in his famous "Box Theory" he used to make more than $ 2 million.
3. Only when the price is higher than 100 days moving average will buy.
The third rule is to apply the 100-day moving average to the bar chart. For most investors, the 100-day MA is normal unless a daily trader may want to use a shorter moving average. Again, the rules are easy to follow. You only buy when the price is above the moving average. The idea is to buy stocks only when the stock is on an uptrend. When they are in a downward trend, you do not want to buy. This is when you sell
selling the rules is also very simple. In addition to the 100-day moving average applied to your bar chart, you also include a 10-day moving average. The line will reflect any price changes faster than 100 antennas. If the price is below the 10-day moving average, the rule is to sell
Remember to know when to buy and sell stocks the secret is to apply your rules and understand that they will not work every single time, Any System Is Better