When investing your money into stocks, there are two basic ways you can do it: through long term traditional investing, or through short term trading.
As a stock trader, you don’t buy stock for it to appreciate in value over time, but rather for it to quickly gain value within a month, week, or even a day. That way, you can buy your stocks when the price is down and sell them when the price is up to make a quick profit.
Timing is everything when it comes to becoming a successful trader. But you might be wondering, when are the best times to trade stocks? That’s exactly what we’re going to discuss in this article.
Here are the top three best times to trade stocks:
Buy Your Stocks On Monday
Traditionally speaking, Monday is the best day of the week to buy your stocks. This is because the stock market will typically drop following weekends, which means that most stocks drop in price as well.
Why do stocks tends to drop by Mondays? The reason why is because when bad news occurs in the stock market, people find out about it over the weekends. Furthermore, investors can become disheartened knowing the weekend is over and they have to get back to work, and even that can have an overall negative effect on the stock market as well.
While not all stocks will fall in price on Monday, this is the best time for you to check up on the price and invest in any that do indeed see their prices down.
Sell Your Stocks On Friday
While Monday and the end of the weekend are when we traditionally see the prices of stock drop, it’s on Friday and the beginning of the weekend when we tend to see them go up. This is especially true for three days weekends or on weekends that have major holidays, because that’s when people tend to feel good.
If you see the price of your favorite stock fall on Monday, don’t be disheartened. Chances are that it will price again on Friday, and that will be the opportune time for you to short sell.
Pay Attention To The Seasonality Of Stocks
Pay attention to stock seasonality because certain stocks perform better than others at different times of the year. Remember that timing is everything when investing in stocks, so knowing which stocks are strongest at which times in the year will be critical to your success as a trader.
For example, let’s say that you know March is traditionally a good month for a stock. You would then want to be buying that stock in January and February when the prices may be down, so you can potentially increase your profit margins.
Obviously the tips in this article are purely generalizations. Even though Monday is traditionally the best day to buy stock, that doesn’t mean it always it. There are exceptions on the best times to trade stocks based on whatever anomalies or circumstances pop up.