Timing Is That Important In Stock Trading
Posted: Sunday, January 16, 2011
by Richard Severson
The Stock Teacher
Is timing important in investing or trading? In the restaurant business its all about location, location and location, but in trading or investing its all about timing, timing and timing.
How would you like to buy a stock at the wrong time? A good stock thats going down as the rest of the market is going down being that 4 out of 5 stocks follow the broad market indexes.
How would you like to buy a stock or a Forex pair thinking it was going to go up but started to go down and you held on hoping for it to change direction as it continued down?
Sound familiar? We all have been there if we have spent much time trading.
Timing is the single most important factor one needs to learn to be successful in investing or trading, how long your money will be tied up is a big factor, so the shorter the time the better the returns and it allows you to trade again and again.
I`m not saying that all short trades are the way to go, but I am saying that waiting for a trade to move while your money is tied up is not good or right, I`m also saying that Timing is everything after you find the market leaders or the good runners.
Buying stocks at the wrong time could cause you to "hold for the long Haul" and that is not right its extremely stupid because of wrong timing and or quessing.
So then is there anything we can do to improve our investing timing? Of course there is, take a class, read a book, do some studying but just make sure that you understand nothing is as important in trading as timing.
Most things run in cycles and even real estate does, you could buy a house at the top of the market like in 1989 and then have to hold until 1996-97 just to break even, I know I did that. Real estate have about 7 year cycles.
Stocks, Commodities and Forex have some kind of cycles as well, up trends then down trends just look at any long term chart and you will see this.
So the secret is to look at long term charts then look at seasonal pattern cycle charts, then have a set of indicators ready at these turning points and if the stock, Commodity or Forex makes the change of direction you will be there and see it change with your indicators crossing over each other and telling you to buy at the right times.
Your indicator needs to be set to help you not get in every whipsaw and minor trend change but to get you in only on the larger real trend changes and that is Timing.
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