Financial Resource

Article by Ajeet Khurana

If you are a stock trader and want to know how to trade successfully, then you must know the principle of market timing. Market timing has made many traders rich and sent others to the poorhouse. Market timing is the most effective benchmark for gauging the performance of your market investments.

“Buy low, sell high” is the main philosophy on which the secret of market success is based. But how do you know how low is low and high is high for the stock? This is where market timing helps you. We all know the prices of stocks fluctuate regularly. At times they move up, at other times down. You buy when the stock price is low and sell when it has reached its high; that is how you trade successfully in the stock market.

Remember; don’t try to find out the reason for the variation in sock prices. Stock market is not rational. Despite the arrival of the computers in the markets, it is still run by the people. And people tend to be emotional, and so they cannot make sensible decisions when gripped by the emotions. But you can use this irrationality to make money in market.

To understand which way the market will move, keep a close watch on the movement of the stock prices of the leading stocks. Do this for some weeks and you will know what direction the market will take. Now once you know how the market will move, follow the buy and sell recommendations strictly. If you don’t follow these recommendations strictly, you will not be able to profit from the market timing.

There are certain techniques for timing the market. Traders have used them successfully to predict the way markets will move. One such technique is called as fixed cycle timing analysis. It provides a large amount of timing data, inclusive of predictive ability. It is very easy to see the results of this technique. It has shown amazing results in the US stock markets than anywhere else. As a result, many investors around the world do use this technique.

However there are many other techniques of market timing that don’t have any predictive ability, yet are very effective. Instead they use the technique of a highly sensitive market following method. And those market timing techniques that use predictive ability use private information, not accessible to the public. (Find out about Macquarie Edge Shares Trading Platform. Also make sure to visit Review of Instaforex Forex Trading.)

If you want to time the market independently, you need to get access to accurate timing information. This is very important for you to access the fluctuations in the market timing signals or stock selection. Hence it is a handy tool for all traders as well as investors.

Following the long term trends for the market or the stock is the secret to make big profits. There are various charts available that show how the stock prices have moved in the past. Study them to decide when to book the profits.

Buying low and selling high consistently along with disciplined approach will help you make profits. However if you are making losses, sell off those stocks and reinvest your money in profitable stocks.

Tags: information, market investments, sensible decisions, technique, timing, us stock markets