Trading on the stock market can be extremely overwhelming. Not only do you need to decide how much you should invest, but you also have to decide what to invest in, how you should do it and when you should do it.
Many young investors will opt to go with the 401k plan provided through their place of employment. However, opening a brokerage account is also an option you can take advantage of. And no matter which brokerage you choose to work with, if you know the ropes you will be able to save money with every trade.
You see, savvy traders know how to get the most out of every penny they invest. They will squeeze a quarter here and a nickel there until they have made tens of thousands of dollars from their investments. This is especially true for those who don’t have much to start investing with.
It doesn’t matter what type of investments you are looking to get into, the rules I am going to share with you will help you save money and get more out of every investment you make.
Rule #1 – Avoid Placing Market Orders Before The Trading Day Opens
When the day opens for trading a lot of strange things can happen. In some cases you may end up paying more for a trade than you intended. You could also end up receiving far less than you expected off a sell.
While this can happen at anytime during the day, it happens most often at the opening bell. This is because when the trading day opens orders pile up quickly due to traders making trades based on last nights news. If it is absolutely necessary for you to make a trade at the opening, place a limit order to protect yourself.
Rule #2 – Trade At The Best Time Of Day
Generally speaking the best time to trade at the market is between 1 p.m. and 2:30 p.m. EST. By this time most of the country is at work. Even those who live on the west coast. Any market shaking statistics will have already been released so you don’t have to worry about a flood of trades coming into the market during this time.
Rule #3 – Buy Stocks At The Best Time Of Month
The best time to buy stocks is between the 18th and 22nd of every month. Any cash that has flowed into the market will usually be at its low ebb around this time. The same goes for prices.
The best time to sell on the other hand is during the first two days of the month and the last two days of the month. Also, the months of September and October are when you should be most aggressive as a buyer. The market tends to bottom during these months. Plan to do the bulk of your selling in April and the beginning of May.