Why not to bottom pick
Too many traders don't know why not to bottom pick. Not only that, some of these traders actually think bottom picking is a good idea. This is never the case.
It may be tempting to bottom pick. After all who wouldn't want to buy a stock when it is at its lowest and sell it when it gets to its highest. The whole buy low, sell high ordeal.
The problem with bottom picking is that it is extremely hard to tell when a stock will make a bottom. The majority of stocks that have been going down in the past will probably keep going down in the near future. That is why most professional traders tell you not to go against the trend. Any successful attempt to find the bottom was probably more luck than anything.
The other thing people will try to do is to get into a stock after a crash when it starts to rally. BIG MISTAKE! Falling stocks will typically rally every now and then right before they crash again. In fact successful traders will consider sell rallies during a bear's markets good practice.
What you might want to consider is not buying falling stocks but shorting falling stocks along with buying stocks that keep going up. This way you are not expecting the stock to do anything other then what it has been doing.
Also instead of picking the exact bottom it may be beneficial to wait for the stock to stabilize and form an uptrend again before buying. This may lose the investor the opportunity to get in when the prices are at their lowest but the benefits of profiting more often will outweigh the potential profit you may have missed out on.
For more information on trading the stock market visit http://www.stocks-simplified.com/Source: Free Articles from ArticlesFactory.com
Related Tags: to, why, not, pick, bottom
When I was young I wanted to learn how to trade the stock market. So I traveled around the country listening to professional traders talk about how they are making money in the market. After trading for a while I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are
