Saturday, December 28, 2013

How to find the entry and exit point for a stock trade

Knowing when to buy a stock is probable the most important thing you need to learn.  Traders need to recognize the buy and sell signals in order to be successful in their stock trading. Traders need to learn to find the low risk buying price points of a stock. You need to know where the support area for a stock and watch for the volume to come in from the buyers. If you are not able to pull the trigger and get in or out of a trade is a clear signal of problems either with the trader or the trading system.
  The next thing you need to do is know how much money you are going to risk on the trade. When you enter the stock trade you need to make sure you have an exit strategy and have set your stop loss. A successful trader will use percentages not money gained or loss to analyze the trade. You can figure this by what percentage you are willing to risk and how much profit you want to make on each trade. Somewhere between 2 and 5 percent is a good starting point.
  When you have all your parameters in place it is time to pull the trigger and make the trade. Once you have made the buy write it down in your trading plan to study later after you have excited the trade. Now that the trade is in place you need to look at where you want to hit the sell button. As a profitable trader you do not want to get greedy. Take a look at where you see resistance check your level II to see where the sellers are stacking up. If the trade is moving in a positive direction it is time to set up a trailing stop.