In the past, I’ve focused mostly on ETFs and small-caps to give you a starting point. But how can you invest in the best stocks for trading? That’s the question I want to address today. (We’ll get to market timing strategies and a few ideas on how to select and evaluate your trades in upcoming posts.)
Most markets are in an important state right now: The Dow Jones Industrial Average is at 23,081. The Dow Jones Industrial Median is at 18,919 (it was 18,879 at press time, and there are two other major indexes, the Standard & Poor’s 500 Index and the Nasdaq Composite.) For a good stock to pick for trade, you have to have a target price target on the stock. Since the Dow’s is very volatile, it can be tricky to determine exactly what your target price should be. So when looking for stocks to trade, it’s better to start with stocks whose share price is relatively higher than the market index value of the index. For instance, if I know the stock has a 3.50 stock price level relative to the S&P 500’s price of 9.00, I can trade in that stock at 4.66 times the market index value per share, or $0.5 per share.
For more on market timing strategies, and more ideas on what to target for a particular trade, come back tomorrow when I’m going to examine a few strategies that have been used successfully in recent years. Until then, let’s take a look at what the best stocks to choose for trade look like in today’s market.
5. The Best Stocks to Trade: Selecting an All-Time High
Dow Jones Industrial Average, 2047
A typical high and low for a stock can be a difficult question to answer, especially during a bull market. But if you’re interested in identifying stocks to trade and are familiar with the history of a stock, you may be able to answer much of the questions you would need to answer. First, what would you look for in the market to get a good buy signal? How can you gauge when to trade? How much risk are you willing to take? What if the stock’s price drops? In today’s market, where there are so many opportunities to cash out, I think it’s best to start with a short position if the market is near a “bottom.”
For more on market timing strategies, and more ideas on what to target for
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