Someone might purchase a stock and then sell it the same day but then purchase that stock every day later and do it all over again. You might even discover some investors who buy and sell a specific stock three or more times each day. This is a fascinating strategy that lets people work with shares which may go in a specific direction. An investor in this situation will attempt to sell their stock before any reversals occur, but that investor will constantly watch for if those reversals end and the stock goes back to its initial positive trend.
Is this a great idea? You have the right to exchange the same stock several times over in 1 day if you desire. Before you do so, you must look at some important points.
First thing to do when trading stocks on the same day would be to see if it’s possible to discover certain patterns. You may notice cases where the inventory’s value varies over the course of a day. You can spot certain signs during the day where it seems a stock is going to dip in value and then return. Here’s a good example of this. You may notice during the trading day the value of this stock is climbing but then drops.
At 10am, the inventory could be $40.50 in value. It is going to progressively grow to $40.70 at approximately 11am but will dip in about 30 minutes to $40.60. After that, the stock will move around $40.90 at 12:30pm, just to fall to $40.70 30 minutes afterwards. At 1pm, the inventory will begin to return up, finally reaching the $41 mark in about one hour. You may also observe that the volume total keeps falling right before the value goes down.
You can make the initial GM trade at 10am when the first selloff of the day occurs. Following this, you’d watch for when the volume slows down. You can sell the stock in about an hour or 2 when the volume becomes low enough to where you can tell folks are just about to begin selling off the inventory. Wait to see if the stock’s decline is quitting. You may have sold that 10am buy at 12pm and noticed the decrease stopped at 1pm. You could make a trade at 1:15pm and keep the inventory until the following decline in the volume happens.
You need to be very careful. You may read about particular patterns and trends to trade and when to get in on them a bit later on in this manual; this info should make trading the same stock several situations a bit easier to do (and possibly profitable).
1 thought for trading the same stock is to search for ones which are more volatile. It’s much easier to realize a sizable gain on a stock when you observe that its value can change dramatically during the day.
The stock is quite expensive with stocks more than $180 in worth as of February 2018. It may initiate the day-trading at $187 but then drop to $182 at 11am just to return up to $186 three hours afterwards.
The odds you have for getting huge payouts are higher if the stock is volatile. This would require that you look carefully at the way the inventory is changing and in case you’re able to spot any patterns at a certain time.
Focus on a Single Stock for Your Day
Whatever you intend on doing with your shares, you ought not try and trade different stocks throughout the day if you would like to trade one stock many times. You must devote all of your attention to this single stock so it is possible to identify when something changes.
Referring back to this General Motors instance, not keeping your eyes on this stock may be costly. You may veer away from the GM stock to make another purchase and you may miss seeing the volume decrease and the GM stock decreasing in value. Consequently, you might lose money as you didn’t sell the stock right before you knew it was going to fall in value. This doesn’t need to be a plan you need to follow each and every day. You just need to stick with that plan during times when you know a stock is ready to proceed in a direction that’s in your favor.
It’s ideal to execute very short-term trades at this time. This is why it’s ideal to perform day-trades with a single stock. Have a look at the intraday-trading graph for a stock in the past couple of days to get an idea of how the stock has traded every day. You might see a stock may have gone down or up rather quickly in only a couple minutes. Some stocks may have been trading less frequently during a day and you may hold on to your purchase for a couple hours. Whatever the situation, you must watch to find out how the value of this stock is changing.
Assess the Long-Term Report
The main thing to do would be to consider the long-term report related to a stock. This gives you a good idea of whether you need to hold onto a stock for a while or in the event you ought to just buy or sell it several times a day.
General Motors may not be the ideal inventory to hold long-term. When you look at how the stock performed from December 2017 to February 2018, you may observe that the inventory kept moving up and down fairly quickly.
Now let us look at the Coca-Cola stock. You might observe that the inventory is a bit more fluid and doesn’t change too often. Meanwhile, the stock was experiencing a small increase in value since the center of 2017. This gives the impression that Coca-Cola could be a better inventory that you hold onto for some time. The stock doesn’t look to be fluid or likely to change in value, but it may move up eventually. This means that you would be more inclined to find a sizable profit from the inventory in the event you kept it for as long as you can.
Each stock is different and you must know about how their values change. Stay focused so that you know when the time is ideal for trading. As you will see from another chapter, there are many instances you’ll need to make transactions based on the signs and patterns you find.