Let’s face it, Gen Z is more enlightened and well-informed about investing than previous generations. However, being informed is not enough to succeed in today’s highly-volatile stock market.
Besides having great know-how about stock market and its trends, you also have to keep yourself updated about the recent progress in the share market. If you want to achieve sustainable growth and success while earning good profits on your investments, you must determine the best times to buy or sell the stock.
It’s no surprise that beginners generally get in a panic while deciding the timing of their first stock purchases. According to investopedia, unlike conventional investing, traders often acquire a short-term focus in the stock market. The trader generally buys a stock in order to get a fast turnaround of a few days or a month. Especially, when it comes to day trading, the analysis may be restrained to hours and even minutes.
So, is there anything like the best timing or the best day to trade in stocks for the newbies? Let’s see…
What’s the Best Time to Trade Stock?
Market volumes and stock prices can be exorbitantly high in the morning. The initial hours signify an opening in which the price volatility is usually high. A seasoned trader has the proficiency to identify the suitable patterns and earn good profit, but a beginner could suffer severe losses as a consequence. So, if you have just set your foot into the stock market, you should avoid trading during these sensitive hours.
However, for experienced traders, the initial 15 minutes are very crucial. In fact the 9:30-10:30 A.M. time span is believed to be one of the most rewarding hours of the day. You can even prolong it for one more hour if let’s say you need some more time for trading. A lot of seasoned and experienced traders stop working after the first 2 trading hours of the day as the market experiences smaller moves with lesser volume after that.
Novice traders should try their luck during the middle of the day which tends to be the most balanced and the safest period. Why? Because, prices are comparatively stable during this timeframe which leads to slow actions and better results.
The market action and volume again push forward in the last few closing hours. The day traders are generally struggling to close out during 3:00-4:00 P.M. timeframe in the hope that the trading momentum will move ahead to the next day.
What’s the Best Day to Trade Stock?
There are traders who believe that some days offer relatively better returns than the others. According to BBC, there isn’t a certain window to invest and receive returns and one should not depend on any seasonal patterns to carry out their trade.
Still there are traders who think that the Monday Effect can bring more profits for them than the other days of the week. There are researches that have attributed to the concept, but there is still very little or no evidence for such effect.
What’s the Best Day to Sell Stock?
Stocks are generally higher on Friday, meaning if you’re interested in short selling, then Friday perhaps would be an ideal day to sell the stock. Due to typically upbeat feelings before a long weekend, the share market tends to spring up prior to these declared holidays.
What’s the Best Month to Buy Stock?
The stock market tends to have compelling returns around the summer months. September is generally believed to be a slow month while October generally has a positive momentum. The January effect is also a popular term which basically refers to the time period when investors aggressively get back to the stock markets leading to the huge price raise.
According to TodayTrader, When it comes to stock market, psychology is certainly the biggest factor. Regardless of any specific month, traders usually sell when they are scared and buy when they’re greedy. Thus, it’s important that one should also keep the psychological factors in consideration besides blindly trusting on the days/month logic.
Conclusion
These recommendations for the ideal time to invest, the perfect day to trade stocks and the best month are merely speculations. Yes, the beginning and closing hours are usually the busiest. However, a lot of traders are profitable in the off-timings too.
All in all, if you’re interested in making great profits on your stock investments, try to build a strong and powerful investment portfolio. Especially, if you’re a beginner, try to create a portfolio that includes a variety of asset classes and investments. In conclusion, with strong portfolio in hand, you can generate profits and minimize losses on any given day.
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