Timing the Market

Best Time of the Day for a Swing or Position Trade

In trading stocks, some people really invest long-term, where they buy and hold, some hold them for a few weeks to a few months, and others constantly trade everyday. I see the advantage of day trading to get money in your pocket quickly but you have to be nimble. Always on your toes, watching the market well throughout the trading day. Or use some tools to pull the triggers at the right time for you. Since I am not a nimble trader and I do have a day job to attend to, day trading is hard, so I go swing trading.

In a down market, and with limited funds to run a margin account to play on the down side, the ways to earn by swing trading is either  go with the shorter up trends that happen within a day or several days, or to go long with contra ETFs. Last week I decided to look at stocks that have a good track record for the past 6 months. A stock that is not that volatile with signs of steady growth. I chose two, SAFM and DRD.

The long term graph looks good, and the past week looks good as well. Since these signs look all good, I decided to go long on these two. Both of these stocks, I purchased last week. Both finished high at the end of the trading day last Friday, February 19, 2016, and both finished high for the week as well. But some how, my buy for that week ended up decreasing my portfolio value and not increasing it. Although I didn’t sell it and still help on to it because this is a swing trade that can turn into a position trade. The week over week and month over month trend is still good for these stocks.

Wait for the lowest point and a confirmation of an up trend for the day before buying

I was at a negative even if these two stocks when up, because I bought the stock at a high point in the daily price change. And that was my main lesson for last week. Although I already kind of know this, it was never something I double checked when buying stocks since they were swing trades, I paid more attention to the weekly and monthly movements, that I carelessly bought near the highest point of the trading day.

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