If you are one of those who misses the opportunity to enter and exit perfect market timing, you need to follow this strategy.
Market timing strategy enables investors to make secure entry and exit from the market by analyzing the trend and book your profit at the time of exit. It enables investor for secure buying and selling of stocks.
It’s an active type of investment. It involves Technical and behavioral analysis. It deals with the estimation of a trend which is followed and entry-exit time is obtained. It can be used in short and intermediate term.
You will find this somewhat similar to momentum investing strategy which also concerns the entry and exit from the market with respect to trend.
This strategy is all about the timing of entry and exit in the market. Investors using this strategy attempts to find the local bottom or near local bottom point in the trend with low-value stock price and perform the buy action, making his entry into the market.
The investor then tries to find a local top or near top point in the trend and perform his sell action booking his profit with the duration of time.It involves high risk. You need to commit full time for continuous monitoring of trend and analysing the perfect time for entry and exit.
It is the active form of trading which can be combined with momentum strategy. One need to excel in technical analysis and understand market psychology and sentiments. Chart analysis, moving average are some analysis one need to know.
If it’s used for short term or intermediate it’s called speculation.
Are you the right person? Who should use this?
It is the best place for high-risk lovers. One need to commit full time to analyse the bottom and top of a trend as it’s a short-term quick decision are required.
If you are a full-time trader and can spare all your time monitoring the prices then this strategy is good for you. Along with this one need to enhance his technical skills for interpreting charts and graphs.
If you are risk lover but have sufficient knowledge of technical analysis it is better to invest low and get experience. This will help you learn from real data
- Enable investors for proper entry and exit from market
- Short term trading involving full-time monitoring of prices.
- High risk is involved but may earn you high returns.
- Proper forecasting techniques are required.
Time is the only thing around which market revolves. Whichever strategy you follow you have to meet the market timings to maximize your profit. If you are short term trader and trade regularly you need this strategy.
The only thing you need to remember is you need to fast and conscious enough to step in each time in the market