Stock Timing Strategies that Work
Submitted by Van Beek on May 4, 2011 - 04:39
Chose a Stock Timing Strategy that works
When you look for stock timing strategies, you want to know what type of strategy it is when you have found one. You can classify the different timing strategies in three different ways. Not all these strategies work that well.
The purpose of stock market timing is to buy and sell your stocks and funds at times when those trades generate more profits for you then when you would buy and sell them randomly.
Pay attention to the following three dimensions when you search and evaluate stock timing strategies:
Predicting or Following
Some strategies are aimed at anticipating changes in stock prices in the future. The objective for such a strategy is to predict when a stock price will turn up or down.
The other type of strategy is to follow existing trends. These strategies are aimed at recognizing existing trend directions as early and reliable as possible. Investors buy or sell their stocks and funds to capitalize on the direction of the trend.
Since nobody knows the future, following is more reliable than predicting (and often more profitable). Predicting is closer to gambling than investing.
Short-term or Long-term
Some stock timing strategies are focused on when during a day or when during a week it is the best time to buy or sell your stocks or funds.
Other strategies are taking a longer term approach and consider periods of many months and years.
Long-term timing strategies are in general more reliable than the approaches that are focused on short-term changes in stock prices. Day-traders are looking for short-term strategies. When you invest to grow your savings, you probably are more interested in long-term stock timing strategies.
Value or Technical
Some timing strategies are using stock valuations as a tool to define if it is a more appropriate time to sell or to buy. When stocks have in historic perspective a low price to earnings ratio, it would be a better time to buy. When the price to earnings ratio is high, these strategies would recommend selling or reducing the exposure to stock assets.
Other strategies are directly analyzing the patterns and trends in the stock prices itself and use this technical analysis as basis for investment decisions.
Both approaches (value and technical) are objective investing strategies and can work well for investors.
Long-term Technical Following
Here at Stock Trend Investing, we have the objective to get the best long-term investing returns to grow our savings. Thus we have a long-term focus and are not short-term oriented.
When we want to gamble and have a good time we play cards or could go to casino. We want to invest our hard-earned savings in a reliable way and opt therefore for a technical Following strategy and not for an approach that is based on valuation predictions.
Hopefully you have found here one of the stock timing strategies that works for you.
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