We have all heard the phrase "buy low - sell high", yet it still amazes me how many traders still do not follow this practice. I believe it has to do with Emotional Intelligence or control of one's emotions. Buying a stock at a low point is not easy because there is fear that it will keep dropping or never begin rising again. Likewise, selling a stock at a high price can be difficult because of greed and the hope that the equity will continue to climb in value.
Trading is not as simple as picking out high and low points of course. Every stock is unique and there are many other factors that need to be researched other than price. But remember, the Stock Market moves on fear and greed. Purchases must be made when others are fearful and sales must be closed when others are greedy. While it is impossible to buy a stock at its 52 week low and sell it at its 52 week high, research and practice will show how to "buy kinda low and sell kinda high".
Instead of looking at stocks with the greatest percentage increase in price for the day, research the companies with the greatest decrease. Many, but not all stocks that take the typical one day walk off the edge of a cliff, bounce back. And remember to always protect profit and limit losses with stop and limit orders.
Brian ©
