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  • Buying stock tips – READ THIS before you start!
  • Buying stock tips – READ THIS before you start!

Buying stock tips – READ THIS before you start!

When do you buy a share?

A difficult but crucial question is when is the best time to buy a stock. Let it be clear that there is no one right answer to this question. There are multiple moments when it is a good idea to buy a stock. We are going to teach you the right timing for your investments by means of a number of tricks with which you can determine the best moment to buy a stock.

Timing is important

The majority of investors buy when the peak is in sight and sell when the bottom is approaching. Many successful investors do the exact opposite: they sell at a peak and buy at a trough. This is how you make the biggest profit, and profit is ultimately what every investor is in it for. But how do you actually determine when it is best to get in?

Fundamental analysis

When buying stocks, fundamental analysis can be very useful in choosing when to buy a stock. Fundamental analysis is a technique in which you assume the value of a company by studying the underlying figures and facts. This can be done, for example, by keeping an eye on the news about a certain company.

When you buy the shares, it is important to thoroughly analyze the information in the media. This is not even about the realized effect that the news has on the company: this effect is usually difficult to predict. No, you are purely interested in the reaction of the markets to the news fact. Therefore, do not reason only from the perspective of the company; reason especially from the point of view of the masses.

Disappointing sales results or warnings of lower profits often cause the price to drop significantly in the short term. When you come across a negative news item, you can profit from this by going short, you then earn money when the price drops. In fundamental analysis, the focus is mainly on action and the subsequent reaction, what will be the effect on the demand for and the supply of the share after the news comes out?

Technical analysis

Technical analysis means that you actually ignore the news completely. With technical analysis, you look at the charts and prices and look for certain patterns. To start with, you can determine what the price has done recently: is there a clear upward or downward trend, or does the price seem to move between two points all the time?

When you can clearly recognize a trend, you can play on it by repeatedly buying or selling after a so-called retracement. This means that you do not buy in the wave movement upwards, no, you buy at the moment that the price moves a bit in the opposite direction. By using technical indicators you can predict this moment more precisely.

When the price moves mainly between two fixed points, we call this consolidation. In this case, it is wise to go short when the higher point is touched and to buy when the lower point is touched.

So when is the best time to buy a share?

Let it be clear that the moment you buy a share is not of vital importance. Because of the possibility to  go short  , you can also make money when prices fall. So you can always make money, as long as there is movement. Don’t pay attention to time, pay attention to timing.

By using fundamental and technical analysis you can predict the price with more certainty, allowing you to make higher profits with your stock trading.

Start buying stocks

If you want to start buying stocks, you need a broker to execute orders and buy stocks. If you invest yourself, you can do this via an online trading platform. There are many different brokers available. Use the service of Compare All Brokers and  compare online stock brokers .

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See also

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