Stocks Trading- Timing It Just Right.
When you are trading in stocks, you have a short term focus, you do not buy the stocks for a gradual appreciation, but a speedy and beneficial turnaround. This can be in a few days, weeks, months, and so on.
Of course, this is specific to trading in short term stocks. Some would say that there is a right time to trade, and of course if you are just starting out as a trader, you will want to start trading at the right time, or even just before the right time, so you can get the hang of it according to Forexrecommend.com
Day trading is the shortest time frame there is for trades, where a trade analysis can be broken down into small timeframes as small as minutes, or even seconds!
But, the real question is,’ Is there a right month to start trading?’ Some would say yes there is, others would state that it doesn’t matter. So, we will take a look into trading days and the best months for trading in the stock market to give you the answer to this question.
January – Special or Not So?
Some people would say that the best month to start trading in is January. However, the markets typically have strong returns in every month of the year.
However, there is the ‘January effect’ which is a phenomenon that takes place at the start of every year when investors return to markets with one hell of a vengeance, which pushes up prices.
Prices go up even higher in small-cap and value stocks the most. However, there really is nothing so special about January aside from trader traditions. January is not really the best month, you might see a rise in prices, but this is only ever influenced by the influx of traders returning with determination at the beginning of the year.
If you want to buy value stocks and small-caps then a good time to buy is at the end of the year, in late December. This way you can be poised and ready for the rise early in the month after.
Of course, the end of the year brings out other benefits too, you will usually find that investors will sell stocks in their droves at the end of the year, especially the ones that have seen a decline.
So, the last days of trading each year are actually quite lucrative bargains for some. Even if there are potential drops in investment for new investors, if you are starting trading this can be a good time to act.
As far as the other months, September and October are not the best to trade, they are known as ‘down months’. However, some would say these are also the best months to sell stocks.
September sees weak returns and has historically been one of the worst months for returns out of the year. October is more positive, but some of the worst crashes in market value ever have happened during October. While it is not as bad you have to watch out for that October volatility.
Best Time Of The Month To Trade.
You might wonder if the beginning, middle, or end of the month is better for selling or buying stocks, but really there is no single day that is best. However, stocks will usually rise at the turn of each month.
This is often thanks to periodic monetary flow becoming more directed towards mutual fundings at the start of each month.
Not to mention how managers of these funds will try to make their balance sheets more neat and organized by the end of each quarter. So, in the middle of the month prices will typically dip.
When buying in the middle of the month is best, and selling is best around the turn of the month.
Does Date, Week, Month And Time Really Matter?
Over the course of history, some months have been shown to be worse for wear in trading, but really it is up to you to decide what works.
As a newbie to the trading scene, there is no rule that says when you should start trading. While December and January have their benefits, there is nothing that says they are 100% definitely better. Just as there is nothing to say that October and September must be avoided at all costs.
Sure, some months have a better or worse track record than others, and there are some anomalies that are well known in the trading world, but the best tool you can use to make a decision on when to start trading is your own judgment.