When it comes to building a stock portfolio of your own, there’s plenty to think about. You might need to take into account the amount of risk that your proposed portfolio carries, and you could also devote time to thinking about which market sectors you want to invest in. But maybe the most important aspect of stock market trading that you’ll need to think about is timing.It’s important to find the right moment to actually opena trade, while you’ll also need to make sure you’ve planned how long you’ll keep it open. This article will look at both sides of the trading time coin and share some advice on how best to go about it.
Placing a trade
The first timing question you’ll need to think about is the exact moment at which you’ll choose to place your trade. The behavior of other traders could affect the value of your stocks, for example: a mass sell-off is sadly always a possibility, and the value of a stock can drop overnight. The behavior of the wider economy is also relevant to the price of stocks and shares and needs to be monitored.
Depending on what kind of analysis you choose to use, the exact format it will take is likely to be different. If you’re a fundamental analyst, for example, you’re likely to look at the second sort of development outlined above: wider economic events, such as interest rate rises or macroeconomic data releases, can spook the markets. Having a stocks and shares calendar on hand to locate when such events might occur is therefore a great help. Or as a technical analyst, you’d perhaps be more likely to focus your energies on the price action figures which reflect the views of other traders. Either way, taking some form of wider market analysis into account when planning your trading time is essential.
Length of a trade
You’ll also need to think about for how long you want to tie up your investments. As a general rule, stock market investments tend to produce good returns over the course of a longer period. While you may be able to profit from quick jumps in a share’s value, the market could easily move in the other direction – so having the time to hang on to your stock is beneficial. Ultimately, it depends on your personal goals – but having time on your side is wise.
Overall, time is clearly a very important factor in stock market trading. Not only can it have a profound impact on how profitable any stock market trade may turn out to be, it’s also important from a strategic perspective. Tying up your stocks for the long term may seem scary on the face of it, but it’s often advisable as a good strategy. And with a handy stocks and shares calendar available to help you identify the best moments to strike, there’s no reason why you can’t make a success of your new stock market career.