Share Trading Tips - Trading Stocks Making New Highs
James Woolley
September 04, 2009
If you are an experienced trader you will have discovered that there are lots of different trading strategies you can use. For example you can use some screening software to look for shares that have been oversold, or you can look for small-cap stocks that are likely to take off in the next few years. However one of the most effective strategies you can use is to keep your eye out for stocks making new highs.
Now it should be pointed out that many traders have difficulty using this type of strategy simply because they are not really happy about trading stocks at such a high price. They will much prefer buying shares when they are a lot cheaper.
However there are many expert investors who generate some excellent returns trading these kinds of stocks. What you have to remember is that if the share price is making new highs, it obviously means that the company is currently in great shape.
So therefore the minute you spot one of these companies, you can start doing some research and scrutinize both their trading statements and their financial accounts. You should find that this is one of the best ways of discovering well-run and highly profitable companies.
Remember if you do like the look of a particular company whose shares are currently making new highs, you don't necessarily have to buy them at that precise moment. For example you could simply add them to your shortlist and consider investing in them later on if the share price comes back down in the future, so that you can buy them at a better price.
Alternatively you may be more of a short-term trader. In which case you should keep a close eye on any stocks making new highs because you can make some excellent returns by entering a long position at the earliest opportunity.
This is because these breakouts can become a self-fulfilling prophecy. In other words the reason why they are often so profitable is because so many traders notice the same breakouts, so as a result of many of these traders jumping on board, the price naturally jumps ahead anyway.
So overall I can definitely recommend that you look out for any shares that are making new highs because you can generate some very healthy profits both as a trader and as an investor. Once stocks start to break upwards they will usually continue going up, at least in the short-term, and particularly if they are supported by trading volumes that are much higher than usual.
To identify which shares are making new highs you can use any number of different websites. The major financial websites will all have regularly updated lists of stocks that are making new highs. You do not necessarily have to look out for stocks making new highs either because if the wider stock market is falling, you may prefer to look for stocks making new lows instead with the aim of opening some possible short positions. Either way, this can be a very profitable way of trading the markets.
Click here to read a review of Marketclub and to read a full INO TV review.
Now it should be pointed out that many traders have difficulty using this type of strategy simply because they are not really happy about trading stocks at such a high price. They will much prefer buying shares when they are a lot cheaper.
However there are many expert investors who generate some excellent returns trading these kinds of stocks. What you have to remember is that if the share price is making new highs, it obviously means that the company is currently in great shape.
So therefore the minute you spot one of these companies, you can start doing some research and scrutinize both their trading statements and their financial accounts. You should find that this is one of the best ways of discovering well-run and highly profitable companies.
Remember if you do like the look of a particular company whose shares are currently making new highs, you don't necessarily have to buy them at that precise moment. For example you could simply add them to your shortlist and consider investing in them later on if the share price comes back down in the future, so that you can buy them at a better price.
Alternatively you may be more of a short-term trader. In which case you should keep a close eye on any stocks making new highs because you can make some excellent returns by entering a long position at the earliest opportunity.
This is because these breakouts can become a self-fulfilling prophecy. In other words the reason why they are often so profitable is because so many traders notice the same breakouts, so as a result of many of these traders jumping on board, the price naturally jumps ahead anyway.
So overall I can definitely recommend that you look out for any shares that are making new highs because you can generate some very healthy profits both as a trader and as an investor. Once stocks start to break upwards they will usually continue going up, at least in the short-term, and particularly if they are supported by trading volumes that are much higher than usual.
To identify which shares are making new highs you can use any number of different websites. The major financial websites will all have regularly updated lists of stocks that are making new highs. You do not necessarily have to look out for stocks making new highs either because if the wider stock market is falling, you may prefer to look for stocks making new lows instead with the aim of opening some possible short positions. Either way, this can be a very profitable way of trading the markets.
Click here to read a review of Marketclub and to read a full INO TV review.