Good trading strategy dictates trade at low risk points, with high probability of success. A good low-risk entry is fun to manage. But it's twice as hard to turn a bad entry into a winner. Timing is the essence of trading, key at low risk levels.
Where is the lowest risk entry on any chart you look at? It's at the pullback, at the moving average, when momentum peaks, falls back, and picks up again. Stochastics and RSI and Williams%R are several indicators that catch these swings back to the mean giving a low-risk entry. That is the best you can do, then manage it well.
Market Maxim
Sell into weakness, works 15% of the time.
Sell into strength, works 50% of the time
The Fibonacci Retracement is an excellent entry technique. When you can hit the Buy Button when price comes crashing down to your price, then you can call yourself a trader.
But realize, there is NO time when you can expect to be right more than 50% of the time. The best laid plans get fleeced, and you better have a backup plan for both directions, at all times, because you're going to need it 50% of the time. If knowledge was the answer, then anyone could be rich, or if TA was the answer, or Fundamentals were the answer, etc. There's no sure-fire way to get rich, but good trading strategy helps, like buying on a pullback, like selling the call against a rise in stock price to lower cost basis and risk.
There are still innumerable answers to "when to buy." Buy when your gut wrenches from the depth of the decline. In this market, you would do well to buy on any 3%-5% pullback, but usually we look for a 10% correction. Traders have had a hard time with this one-way market for the past two years. Better to learn investing, develop a plan, and become consistent. Then worry about "trading" later.
Trading is not a good beginner subject for quite awhile.
From one mentor:
Most traders we speak with have learning curves that have cost them between $15,000 and $70,000 and up to two years in time.
Five Minute Investing: How To Evaluate A Trading Strategy
http://www.investopedia.com/university/f...
The Cardinal Sin Of Beginning Investing -- And How To Avoid It
http://www.investopedia.com/stock-analys...
All stocks go up and down over almost any time frame you pick. Determining the absolute low point, in advance, for any specific time frame would be dumb luck.
As to when a stock is suitable for buying, there are two ways to approach that question:
1. If you are a long term investor and you are confident the stock will go in time, buy when the fundamentals meet your parameters. Where the price is at "now" doesn't matter that much if you are confident it will go up over time and are prepared to ride out the downs. Waiting for it to drop to that magical low could mean you never buy it.
2. If you are a short term trader make your best guess. And if you are wrong take the loss and get out.
You will sometimes be wrong with either method. Just determine your time frame, methodology, and be consistent.
Has it occurred to you that this is the entire premise of the stock market, the one thing that if a person could answer it they would become rich? What makes you think the bunch of slack jawed morons on Yahoo Answers would be able to unlock the secret to success in the stock market?
Buy them at the closest of the EMA8
good question. If anyone knew the answer, they would be very rich, and not likely to tell anyone else. I do not believe that there is an answer.
Suppose I found a stock of positive performance (meaning investors will want it). I want to buy low, as in when the stock price is low and the performance would make the value rise, and then sell high, for obvious reasons. Is there any indication as to when the shares are suitable for buying (probably in mass quantities)?
The problem is, the simulation website (smartstocks.com) never says when the stock price is low and suitable for purchasing shares.
