06 Jun Market Timing Is an Essential for Trading and Investing
Market timing is something every investor and trader should be aware of and in tune to. Market Timing is explained as the necessary strategy of making buy and sell choices in an ever changing and wildly fluctuating marketplace. Traders and investors make their decisions largely based on fundamental analysis or technical analysis. While many traders and investors constantly sit at the computer following their positions, other limit their times to trade. They may trade in the morning or the afternoon in the stock markets or during the dark of night for the Forex market.
What is important to realize for all who invest their money, is that timing is crucial. The old adage of, “Buy low, Sell high.” makes sense but is difficult if not impossible to abide by. Every investor needs to read charts and to know where on the chart the desired positions to enter and exist are located. Any investor who does not know the fundamentals of trading needs to begin a course of study before they begin investing.
Market Timing for the American Stock Markets
The American stock markets are open for trading on normal business hours during the week. Traders need to adjust their trading clock to Easter Standard or Daylight Savings times. Most who know the stock markets do not trade when the markets first open but follow the volume and the trading direction of those traders who must place orders by their clients. After the initial rush of morning trading takes place, is the time for the small independent investor to take action. Often near the lunch hours, the trading slows to a crawl and then picks up again after lunch. The afternoon session will substantiate whether you have made a good decision or a bad one.
Market Timing for the Forex Currencies Market and other World Markets
While investors usually trade the stock markets, traders like the currency markets where volatility is huge. These markets bring a new set of timing situations into the mix. Forex, the Foreign Exchange, deals in one country’s currencies traded against another country’s currency. These markets are open around the clock from the beginning of the Asia markets opening Monday morning in Asia/Sunday night in the U.S. Trading continues until the close of the U.S. Forex market in New York.
Here Technical Analysis is the choice of traders who do not invest for the long run but take a position and exit often within the day. It is important to realize that currencies fluctuate and can not skyrocket or crash like stocks. In Forex timing is everything and Technical Analysts make use of a myriad of indicators to determine times to buy and sell.
Investing is a critical component in a successful retirement 401k plan. Indices and Mutual Funds are relatively safe and over time will reward the investor.
Traders are a more adventurous breed. They enjoy being in the middle of the action taking chances based on risk aversion, fear, and greed. But knowledge is power, study before you begin.