As the stock market continues its volatile ride, a unique investment strategy has emerged in the form of long trades. Long trades involve a trader entering a position expecting a stock to go up long-term, and often times those positions are held for a few days, weeks, or even months.
For many investors, the idea of entering a long trade may seem appealing when the market shows signs of a bull run. But now, with the market in fluctuating with so many unknowns on the horizon, now is not the time to be taking long trades.
The reason is simple: the stock market does not only go up. It goes up, down, and sideways. Traders must be wary of extended bouts of sideways activity, which can lead to profit taking and losses. And with the uncertainty of the market, bouts of sideways activity are increasingly likely.
The most effective way of responding to this volatility is through patience. Watch what’s going on in the market, watch the news, and wait for the right time to enter a long trade. Wait for a clear signs of a bull run before starting a long trade.
One way to approach this patient approach is by waiting for the strength of the current bull run to be tested and for some stability in the prices to become apparent. Don’t rush into a long trade just because the market seems to be trending up.
Take the time to research the stocks you are considering for a long trade. Look for strong fundamentals and strong company performance as signs that your chosen stocks may continue its price appreciation.
And be sure to set a plan and exit strategy. When will you get in and when do you plan to exit? What specific signals make you think the market may turn bearish? Do you have any “stop loss” orders in place? It’s important to plan out every detail of a potential trade before starting it to limit risk.
In the current market climate, it may be tempting to start a long trade right away. However, now is not the time to start a long trade. Be patient, take the time to research, and set a clear plan before entering any long positions. Doing so can help to maximize your returns and mitigate some of the risks of such a volatile market.
As the stock market continues its volatile ride, a unique investment strategy has emerged in the form of long trades. Long trades involve a trader entering a position expecting a stock to go up long-term, and often times those positions are held for a few days, weeks, or even months.
For many investors, the idea of entering a long trade may seem appealing when the market shows signs of a bull run. But now, with the market in fluctuating with so many unknowns on the horizon, now is not the time to be taking long trades.
The reason is simple: the stock market does not only go up. It goes up, down, and sideways. Traders must be wary of extended bouts of sideways activity, which can lead to profit taking and losses. And with the uncertainty of the market, bouts of sideways activity are increasingly likely.
The most effective way of responding to this volatility is through patience. Watch what’s going on in the market, watch the news, and wait for the right time to enter a long trade. Wait for a clear signs of a bull run before starting a long trade.
One way to approach this patient approach is by waiting for the strength of the current bull run to be tested and for some stability in the prices to become apparent. Don’t rush into a long trade just because the market seems to be trending up.
Take the time to research the stocks you are considering for a long trade. Look for strong fundamentals and strong company performance as signs that your chosen stocks may continue its price appreciation.
And be sure to set a plan and exit strategy. When will you get in and when do you plan to exit? What specific signals make you think the market may turn bearish? Do you have any “stop loss” orders in place? It’s important to plan out every detail of a potential trade before starting it to limit risk.
In the current market climate, it may be tempting to start a long trade right away. However, now is not the time to start a long trade. Be patient, take the time to research, and set a clear plan before entering any long positions. Doing so can help to maximize your returns and mitigate some of the risks of such a volatile market.
