Develop Your Own Market Lens by Brett Grendahl
When do you know itís the right time to buy? When
do you know itís the right time to sell? Hereís how
you can approach these critical decisions.
Buying and selling decisions can plague
your thinking. It is only when you put
these questions under the lens of why you buy and sell stocks will you get consistent success in
making money in the stock market. Hereís the foundation for how I approach
these critical decisions.
First, how do you deal with
the overwhelming amount of
information about buying
stocks and researching companies
in which to invest your
money? How do you know what
to pay attention to and what to
throw away? One major step in
my trading occurred when I
realized I needed to figure out
when it was time to act. Before
I even think of putting my
money at risk in a stock, I first
put it through my own market
lens, a specific chart, that I understand.
One glance at my market
lens and Iíll know if I should
watch this stock, if I should act
right now, or if I should not pay
any attention at all.
THE MARKET LENS
As a trader of stocks, we deal
with numbers every day. Part of the beauty of working with numbers is that we can
chart daily fluctuations to improve how we view the
price action. Thatís why charts are prevalent tools for
the pros, and they should be for you too. While it is
easy to find software to chart stock price movements
(most online brokers provide fairly decent charts), it
is just as easy to get hung up in the minutiae of
charting and lose sight of why we use charts in the
first place. We should use charts to improve our
decisions, not impede them!