Simplified Sunday #20 – Question Bag – When to Trade? Why Bold Symbols?
filed in Simplified Sunday Series on May.30, 2009
So this week I have two questions that stood out from my weekly questions I get in my email. I try to answer most if not all as soon as I get a chance, but with some being interesting like the two I have today, I think its good to share.
Question #1
When is the best time to trade during the day??
Answer
Personally, when I have anticipated an active day for a specific stock, I have mentioned how I would not buy right at the open as its the most volatile part. This is usually the most hectic part of the trading day as there is activity from the previous close, overnight news, and general buyers and sellers looking to get in at the start.
The middle of the day is typically the most calm and stable period of the average trading day. This is the time of day when people are waiting for further news to be announced. Because most of the day’s news releases have already been factored into stock prices, many are watching to see where the market may be heading for the remainder of the day. Because prices are relatively stable during this period, it’s a good time for a beginner to place trades.
Heading towards the last hours of the trading day, volatility and volume increase again. During this part of the day, traders might be trying to close some of their trades, or they may be attempting to join a late-day rally in the hope that the momentum will carry forward into the next trading day.
Depending on your risk aversion, you should see these patterns as the various opportunities to get in.
Question #2
Why are some stock quotes in bold print in the newspaper?
Answer
Believe it or not, but some people actually read a newspaper…in the traditional sense! Normally when I’m traveling or away from a computer, I will pickup the local paper and pull up the business section for my daily fix.
The quick answer as to why the font on some stocks is in bold is simple: its used to emphasize stocks that have moved upwards more than 5%. This is done to also quick prominance to those that were highly active for the day (and hence the biggest movers).
Hope these quick question and answers simplify some of the daily curiosities related to the stock market.
Happy Investing!
Aman, MBA
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May 31st, 2009 on 12:15 pm
Very useful article, at least for the beginner like me who may be interested in trading. Hope you’ll post about your trade earning soon
Benjamin Cip´s last blog post..On The Way To Make Your First Six-Figure Income
[Reply]
Aman@BullsBattleBears Reply:
June 1st, 2009 at 10:34 pm
yes, I”m trying to compile that into a blog post…my trades are all calculated for each month and its just the matter of trying to figure out how to easily post the results. I tired the Google docs in the past but it was not that clean. Suggestions??
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