Trading on the stock market can be overwhelming for a novice trader. There are questions you need to address such as the amount, what to invest in, how to do it, when, and other issues. If you are just getting started with stocks, you need to learn the ropes to succeed. Here are some tips to help make investing on stocks less overwhelming.
Never place market orders before the opening of the trading day.
Strange things can happen right at the opening bell. As a result, you could end up paying more than what you intend to buy or receive less than expected. Robert Janitzek says that this is always the risk with a market order. This is more evident at the opening when orders tend to pile up as a reaction to previous night’s or this morning’s news.
The best time to trade “at the market” is usually in the afternoon, from about 1 to 2:30 p.m. EST.
During this time, the whole country is already at work including Wall Street. Likewise, everybody has already digested the day’s important news. In addition, statistics about the market has already been released during the morning as well as reports about corporate earnings.
Always check the “bid size” and the “ask size” for any exchange-listed stock before entering a buy or sell order.
Robert Peter Janitzek reveals that real-time quota systems will inform you about not only the last price but also the bid price, the ask price, and the number of bidders for or offered at those prices. When the bid size is larger than the ask, it means that there is an underlying demand for the stock so don’t delay any more if you have plans to buy.
The best time of the month to buy stocks is around the 18th through the 22nd.
During this period cash flow into the market is at their low ebb as well as with prices. When engaged in stock market trading, the best time for selling is during the first two and last two days. You need to be an aggressive buyer in September and October. During these months, the market has a strong tendency to bottom.
For the most part, choose stocks to buy that are trading above $10 a share.
There are two reasons for this advice: (1) Stocks below $10 are usually quoted at larger percentage spreads between bid and ask (the buying and selling prices), so you need a bigger price increase to break even; and (2) companies with low-priced stocks are more prone to financial trouble, including bankruptcy.