Over time I began to realize another look into this phrase of buying low and selling high. Here are a few of my high points that i thought i would share with you. As my interest in trading and the idea of consecutive returns began to grow on me, I realized on thing- I like the feeling of seeing a stock chart with a up-trend or incline over the past few days. To me, it gives a feeling of security that a stock is already doing well and in hopes will continue to do so. Of course the stocks' run will end eventually. You just need to realize when to get in and out of that particular investment. As i was saying, I prefer to see an uptrend before i decide to buy. In conclusion, you can think of my statement as, buy high, sell higher. That is what i began to learn over the past months or research, but remember, stocks trends do seem to change every so often.. Dont' feel you HAVE to invest in a company who you thinks trend is almost over. There are many many more opportunities out there. Remember that.
Another point I have that goes along with buying low is this- A stock could drop, drop to a penny stock, go bankrupt, out of business. That would cause a stock to be low and a beginner or newcomer to the stock market ordeal could relate this quote to it and say, "the stock dropped, its low, soon it will return to its normal price, i will buy." NOT ALL THE TIME, if a stock drops, it doesn't mean it will come back in price.
Make sure to remember:
- Buy Low, sell high is correct, but there are limitations. If a stock drops drastically, there could be more room for it to drop.
- Buy high sell high is what i use often, but dont' get me wrong by this. A stock has it up-trends and down-trends. The different trends should end sooner or later. They will not all last forever.