Using Routines to Produce Consistent Trades
The stock market attracts a lot of people because they think they may be the lucky ones to pick the right stock or stocks and hit it rich quick. In some cases, that has happened and probably will happen again. If you purchase an individual stock and hold it long enough, chances are you will make money over time.
The question is trying to determine which stock to buy, the right time to purchase the stock, and the optimum time to sell the stock. If the stock you purchased has increased in price by 10% will it continue to increase? Should you sell now and take the profit? If you sell the stock now, what are the tax implications? In some cases, people establish a daily stock market routine that may help them achieve greater success in trading.
Generally, there are three separate time periods each day that need attention and analysis, the first is the pre-market timeframe. For your pre-market routine, consider that the stock market opens for trading each day (except weekends and holidays) at 9:30 AM Eastern Standard Time, pre-market trading normally occurs from 8:00 AM – 9:30 AM. During this timeframe, you can place trades or orders, you can review new company announcements, watch for earnings updates, check the futures market, review major analysis ratings of specific stocks, monitor price changes, etc. This will help you locate potential buying opportunities and develop your plan of attack for the day.
The next routine you should consider incorporating into your stock trading system is the intraday routine. The intraday routine is important because the market is open; you are able to evaluate activity, the volume of trading, pricing trends for the day, and to use that information to predict where the stock is headed for the rest of the day as you move toward the market closing. The decisions you make based on your intraday analysis are critical, they can make or break your success for the day.
The final routine you should add to your personal trading system is the after-market routine. At this point in time the market has ceased trading for the day and you can review and evaluate the performance. How did your strategies work out? From a financial standpoint, are you ahead compared to where you were this morning? Take this opportunity to record trades, tax information, and other pertinent information you may need later. You can also take this opportunity to catch up on after market quotes and message boards to stay ahead of the trend. Whether you are a day trader or in the market for the longer haul, if you establish pre-market, intraday, and after-market routines they will likely help you meet your goals faster than just random, unfocused trading.
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