As an online trading entrepreneur, the main focus of your target is to buy stock when it is priced low and sell when the market rises. Yes, that’s easier said than done. According to Timothy Marshall, a senior financial advisor at Wilkins Finance, buying low and selling high does not simply lie with watching the financial market like a hawk waiting for its prey. It takes experience, strategy and a solid understanding of what exactly impacts the rise and fall of the market. So how exactly does one buy stock at a low price and sell it for a substantial profit?
When it comes to making a trade, it’s all about timing
If you want to purchase stock at a low price, your timing should be immaculate. The best time to do this would be when the market you are trading in has stabilized after a fall in stock pricing. Remember though, that you need to time your trades perfectly as at any moment, the price could rise again and you miss the window of cheap stock.
Search for companies that have great potential for growth in the future
When wanting to invest and trade shares in a company, you would, of course, want to purchase these shares at a low price. To do this, you need to search for companies that will have growth potential in the future. Take caution and do your research with care as you wouldn’t want to buy shares in a company that won’t bring you any profit.
Speculation can work to your advantage
Although many speculations over stock markets turn out to be just that, legitimate speculations can work to your advantage. If you want to buy stock at a low price, you need to do so when speculation of that market is relatively low. Once speculation picks up, the market will start rising and your profit margins will rise as well.
Keep an open mind as to what the stock market will do next
As human beings, the obvious choice will be that when the market starts dropping, doubt sets in and many traders instantly sell off their stocks in fear of losing all their investments. If you bought stock at a low price and the market has risen a little and then fallen again, do not make decisions based on emotion. Wait it out and only sell your stock if the market dives lower than the price you have paid for the already cheap stock.
Making use of a broker’s stock trading platform
When making use of your broker’s stock trading platform to manage your portfolio, you need to take a few things into consideration. If you are trading according to the buy-low-sell-high strategy, both your internet connection and the broker’s platform need to load fast. Apart from that, you need to make use of trading systems that are up-to-date. The reason for this is that should you want to time a trade, you wouldn’t want any delays. If you are ready to buy or sell stock at a certain point in time, you don’t want technicalities such as a slow internet connection make you miss the buy or sell window. This will impact your profits negatively and no trader wants that!
Being a small business owner in the online financial trading world is not something that anyone can master. As with any business, you need to be prepared to take a few knocks every now and again. When trading, there is no way your trades will be successful every single time. Although you can minimise losses substantially by taking in as much trading knowledge as you can, even top expert traders will let you know that you need to be able to shake it off and carry on building your online trading business. However, with the above-mentioned tips and strategies on how to buy low and sell high, your profits will look much better over the long run.