Unless you’ve got the gifts of the world’s greatest investors, trading on the stock market is probably a mystery to you. Sure, you know that it involves buying and selling stocks, but how do you know when to pull the trigger?

Understanding when to buy and sell stocks is the key to successful trading. In order to do that, you need to cultivate a sensitivity to the market and anticipate its trends. 

We’re going to look at some ways that you can know how to know when to buy and sell stocks. We hope the ideas below build your confidence and, hopefully, make you some money. 

Let’s get started. 

Buy Low, Sell High

The rule of thumb with stocks is to “buy low and sell high.” That means you purchase stocks when they’re not worth very much and sell them when they’ve picked up a little more value. 

Ideally, you buy at the lowest point in the stock’s history and sell at its highest point. It’s impossible to know precisely when those low and high points will be, though. Further, it’s difficult to know when dramatic changes in value will occur. 

If it were easy to predict significant changes in stock market activity, we’d all be a lot richer. While there’s no way to predict with perfect accuracy, there are things you can do to anticipate trends and inch your portfolio in the right direction. 

Create a “Sell Point” Threshold

One way to improve your overall earnings is to keep stocks within a rigid selling threshold. In other words, determine clear high and low selling points and stick to them. Even if your stock is skyrocketing upward, selling at a particular point is the safest thing to do. 

One trap of stocks is believing that the growth will continue forever. That’s fine until you wake up and the stock has tanked, losing you money. 

The same is true for the other side of things. Don’t ride a failing stock all the way down to zero. Just pick a selling point you’re comfortable with and sell when the stock reaches it. 

Working with TradeStation can help you set these thresholds so you don’t have to monitor stocks constantly. 

Buy Stocks After Researching Them

You’re looking for companies that are projected to grow in the future. Some of that might have to do with the research whereas your instinct plays some part as well. 

The important thing, though, is that you look at the market, look at the company, and purchase stocks when you truly believe that they’ll grow. Don’t buy stocks because they’re popular that day. 

If you’re a day trader, there could be some merit to buying and selling stocks quickly. If not, look for stocks that you can ride over a number of years. 

Still Curious About When to Buy and Sell Stocks?

We hope our look at when to buy and sell stocks was useful to you. Unfortunately, there’s no way to know exactly how to buy and sell stock. The ideas above can facilitate your efforts, though. 

There’s more to learn. Explore our site for ideas on investing, financial success, wellness, and a whole lot more.