Short term share trading strategy
Short-term trading refers to those trading strategies in stock market or futures market in which the time duration between entry and exit is within a range of few days to short term share trading strategy weeks. There are two main school of thoughts: Short term trading can be very risky and unpredictable due to the volatile nature of the stock market at times.
Within the time frame of a day and a week many factors can have a major effect on a stock's price. Simply watching the news or reading financial statements will not prepare one to have success in the short term.
By the time news comes out the markets have short term share trading strategy responded and most of the potential gains for investors are gone. Buying or selling a stock that does not have much volume can move it up or down. Small investors have little effect but large mutual funds and hedge funds can determine the minute-to-minute pricing of stocks through supply and demand Cramer,p.
Watching whether a stock is trending up or down can be a sure sign as to sell or buy in the short run. This is called the moving average or the average price of a stock over a specific period of time. As a stock is trending upward throughout a day or two it could be an opportunity for gains and as a stock trends downward it could be a great opportunity to short the stock.
Many analysts use chart patterns in an attempt to forecast the market. Formulas and market theories have been developed short term share trading strategy conquer short term trading. According to Masteika and Rutkauskaswhen viewing a stock's chart pattern over a few days, the investor should buy shortly after the highest chart bar and then place a trailing stop order which lets profits run and cuts losses in response to market price changes p.
Because short term trading can be very risky for small investors it has been advised by many professionals to limit short term trading and lean more towards value investing or buying and short term share trading strategy a position short term share trading strategy the long term.