Investing is, in fact, a fun endeavor to get into. As long as you are investing money that you can afford to lose, being an investor is a very exciting experience.
Just like any activity, there are tricks and tips that can help make the undertaking a lot more enjoyable. When it comes to investing, these tricks can mean more profits for the investor. That’s not a bad prospect at all, is it?
Well, without further adieu, here are some tricks you can use to make a lot more out of your investments.
We all know what traders do when the price goes down. They try to cut their losses and execute a sell position. If they’ve already gained from their investment, then that’s great. If they haven’t yet, they try to keep their losses to a minimum by making an exit position.
Now, have you ever wondered who it is that buys what the others are selling? These are the traders that see an opportunity in the depreciating stock. After all, the price might just go up again one day. These are traders who know that they can buy more with the current price.
Why don’t you think about selling off your shares when the prices are in a downtrend, and then purchasing the same stock again at the lowest price possible? Of course, you’d have to analyze the company if it has the potential of coming back up again.
This one is mostly applicable to foreign exchange or FOREX. Knowing when to trade is crucial to forex traders, because they’re typically trading short term or within the day.
Let’s say, you’re investing in the GBP/USD currency pair. You’d want to earn money from the GBP or Great Britain Pound going up in price in the market. Basic investing tells us that a rise in price is a result of high trading volume. Simply put, the prices rise when many people are buying the currency.
When is the time when trading volume is high for a certain currency? You guessed right – it’s when the market opens. Traders tend to buy more than sell at the beginning of any trading day, driving the price of the currency up.
If you’re trying to aim big in one blow instead of just investing in the long term, you’d have to be discerning when you can make an entry by buying a specific stock.
This means that you’ll have to closely follow a company for quite some time before you put money into its stock. You see, a company’s stock price goes up materially when there is news of an upcoming positive event, or if there are rumblings of a new product that’s potentially profitable for the firm.
Of course, the only way you can spot those indicators is by following the company. Fortunately, trading tools have the capability of collating news for you. All you have to do is just filter the search results with the company name, and you can see all the news you need to read about it.
You might also want to follow the company’s regulatory quarterly reports for a more intimate snapshot.
Happy investing, everyone! For more articles like this, simply follow our blog.
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