First buying stocks and then selling them when they reach a high, then waiting for them to dip and buy back in at a cheaper price?
Answers (2)
well, this is what everybody is looking for... buy cheap and sell high. i am reluctant to call this a strategy. anyway, forgetting about terminology, the key is to identify that bottoms and highs. everybody is looking for this, a very few really can do it. i suggest a different strategy: 1) understand the overall trend of the market (if any - market can be in a consolidation period w/o significant swings up/down) 2) if the trend is up then try to identify those stocks that you believe would normally outperform that market 3) Do not look for bottoms - when there are signs that the bulls jump over that stock, then just buy and stay with the trend (pay attention to downtrends, the fact that there may be a bounce back does not mean that the downtrend is over... . Look for double, triple bottoms, accumulation patterns etc). Unfortunatelly you will have to study a lot in order to be able to understand those patterns and avoid fake signals. In a bear market you should have a net short postion but this is more complicated as it involves usually leveraged derrivatives which can be deadly - stay away from them at least for 10 years if you are a beginner. good luck!