When to look at stock price varies with whether one is interested in long term investing or day trading. The day trader follows stock prices by the day, hour, or minute in order to profit from stock volatility and market volatility. When to look at stock price for a long term investor is after all fundamental analysis has been done. When a long term investor wants to add to his stock portfolio he will look for stocks with a margin of safety and intrinsic stock value. Picking stocks that look to be long term investments, the long term investor will then look at the price to earnings ratio, price to sales ratio, and other measures of whether a stock as priced too low or too high. Both investor and trader make profitable use of Candlestick analysis in anticipating market sentiment driven price movement. Whether one is picking sound investments and planning on holding stocks forever, or trading for a minute or two, buying at the bottom of a price cycle is profitable and is what the use of Candlestick pattern formations allows one to do.
When and How to Buy Stocks
Today’s epitome of the long term investor is the legendary Warren Buffett. The so called Oracle of Omaha is known to spend his time evaluating stocks for their long term growth and profit prospects. Follow his lead and when you decide that a company’s combination of expertise, product development, sales, market share, and management competence is what you are looking for, that is when to look at stock price. This way you can invest in growing companies and not just in a company that is being hyped in a pump and dump operation! This approach is the opposite of what many investors do. It is relatively easy to screen for a low price to earnings ratio, low priced stocks, and the like. If investing in penny stocks were the key to successful stock investing, the job would be easy. Just buy the cheapest stocks around and wait for the profits to roll in. Penny stocks trading can be lucrative but investing in stocks when a low price is the only criteria is full of pitfalls. When to look at stock price on a penny stock is after one is assured that the basic information about the stock is accurate and that stock price really reflects stock value. One should also be aware that technical analysis tools work best in high volume trading which is typically absent in penny stocks.
Trading as Opposed to Buy and Hold
For the day trader when to look at stock price is whenever one is trading. Using Candlestick charting techniques a trader can profit from price movement in any given stock. He or she is not limited to a handful of stocks. The trader will be equally interested in stocks that are in trouble as in stocks that have a shining future. Selling short on stocks about to fall in price can be just as profitable as buying stocks that are in upward market trends. Because stock price patterns repeat themselves over time it is possible to anticipate the continuation of a developing pattern. When to look at stock price and stock price patterns is always, when using Candlestick trading tactics. And, this approach can also be profitable for the long term investor. When you have chosen you target stock there is no sense in buying that stock when it is at its top price but rather when there is a hiccup in the market and the price is more favorable. Thus one follows fundamental analysis with technical analysis for best results.