When and how to buy a stock you like?

[jedi1648]

Do you place your buy order on a market up day or down day, or you wait for the 2nd up day (to confirm your favourable view of the stock) or 2nd down day (cheaper)?

Do you place your order at market or at a specified price?

Do you place your online order before the market opens, immediately after the market opens, or before the market closes?

[ccyk]

Do you place your buy order on a market up day or down day, or you wait for the 2nd up day (to confirm your favourable view of the stock) or 2nd down day (cheaper)?

Do you place your order at market or at a specified price?

Do you place your online order before the market opens, immediately after the market opens, or before the market closes?

I always place order at specified price, even if I want to buy immediately at ask. say 85% i place below bid and let sp to come down. 15% i buy at ask.
pay some few hundreds to learn never use market order again.

[Allen32]

Do you place your buy order on a market up day or down day, or you wait for the 2nd up day (to confirm your favourable view of the stock) or 2nd down day (cheaper)?
Depends but you should watch the price against a 10d and 50d moving average. It's about the stock you want and the price you want to pay. I don't generally consider market up or down as a prime decision maker but generally a decision factor if the market is going down. I don't buy at peak but sometimes wait till bottom feeder days such as last Octobers lows or the downturn earlier last quarter.


Do you place your order at market or at a specified price?
I never use a market order. Always set your price that you feel is acceptable for the stock.


Do you place your online order before the market opens, immediately after the market opens, or before the market closes?
I generally never send orders when markets are closed or 45 mins to 1 hour after markets open. Volumes & price change quickly in this period because of the other people who have set off hours orders... Watch the sentiment and volume direction of the stock... It may go down after an initial peak... If it's flying higher and you have a good broker with fast order processing then it maybe worth the few extras pennines to catch a rising stock. For fun, watch all the clowns buying or selling after Jim Kramer's recommendation on a security from the night before! Very amusing... These people set afterhour orders and get burned almost everytime in the 1st 30 minutes of market open. :D

I like late afternoons personally when the instituitional investors place their large orders. As the previous poster mentions, set an 85% price and you may get lucky to pick it up at that price. If not, wait another day... Be patient and set your strike depending on your greed level!

My two cents... I am sure other people have different strategies they employ.

[rfdrfd]

Do you place your buy order on a market up day or down day, or you wait for the 2nd up day (to confirm your favourable view of the stock) or 2nd down day (cheaper)?

Do you place your order at market or at a specified price?

Do you place your online order before the market opens, immediately after the market opens, or before the market closes?

Those are excellent questions. The true answer is a very long complicated one. Up day or Down day doesn't tell you its a good time to buy a stock. There are many ways to determine that. Could be fundamentals or charts or moving averages, or trends, etc. You need to learn more about stocks and why prices moves before you can truly answer that question. And before you learn that, do NOT just jump in with real money. Write it down on paper and pretend you bought it and see how you did. Best to leave it to "professionals" if you dont have a method to trade your stocks. eg. give your money to a investment advisor.

For your other questions, on WHEN to place an order, that also follows the above, AFTER you learn some methods on trading stocks successfully. Because the timing of when to get into a stock differs depending on the method.

Also, you need to look at market correlation. Is the S&P at a point where it will go up? or down? If you determine that today is a good time to buy your stock, but the market is in a downward trend, it will drag your stock with it. S&P is 500 stocks, so that is like an ocean. Your stock is merely a pool of water in the ocean.

[bgallagher]

Here's an article that can help :):
Help! When should I pull the trigger on a stock purchase? (http://www.theglobeandmail.com/globe-investor/investment-ideas/market-timing-for-the-long-term/article7501150/)

[bgallagher]

As the previous poster mentions, set an 85% price and you may get lucky to pick it up at that price. If not, wait another day... Be patient and set your strike depending on your greed level!

What is 85% price and how does it work?

[rodbarc]

If I'm buying to invest, I set a GTC order on the weekend to buy at EMA(200) price. Then I review the order on next weekend and adjust accordingly if I have to. And keep doing this until it buys at the price that I want. I use TA to determine if current trend is up or down. If trend is up, I'll repeat the process, with an adjusted price. If trend is down and I bought some at my EMA(200) price, I set an additional buy order (GTC) to buy at 5% lower than my previous order. I don't invest all my cash at once, I do 25% at time, so I can repeat this buying process up to 4 times, every time cheaper than previous time. This prevents me of buying at a high price and it requires little watching. The stocks on my portfolio will hit EMA(200) at least once in a year, so I just need to wait.

If I'm buying (or shorting) for especulation, I use options and it's a completely different game.

Rod

[rfdrfd]

If I'm buying to invest, I set a GTC order on the weekend to buy at EMA(200) price. Then I review the order on next weekend and adjust accordingly if I have to. And keep doing this until it buys at the price that I want. I use TA to determine if current trend is up or down. If trend is up, I'll repeat the process, with an adjusted price. If trend is down and I bought some at my EMA(200) price, I set an additional buy order (GTC) to buy at 5% lower than my previous order. I don't invest all my cash at once, I do 25% at time, so I can repeat this buying process up to 4 times, every time cheaper than previous time. This prevents me of buying at a high price and it requires little watching. The stocks on my portfolio will hit EMA(200) at least once in a year, so I just need to wait.

If I'm buying (or shorting) for especulation, I use options and it's a completely different game.

Rod

A negative part of this method is, if the stock continues going down after you finished all your buying, and stays down below your average cost for a length of time. Your annualized returns will be horrible and if the stock continues down, averaging down will exaggerate the loss even more.

If the stock goes back up, then yes, your method will be good. However, when trading stocks, one should #1 manage risk. Where's your stop in all of this?

Using averages or indicators do not provide high enough probability. Because EVERY indicator in the World lags price. First anlyze price action, THEN use indicators to add to your analysis.

[rodbarc]

A negative part of this method is, if the stock continues going down after you finished all your buying, and stays down below your average cost for a length of time. Your annualized returns will be horrible and if the stock continues down, averaging down will exaggerate the loss even more..

I only buy stocks as long term investments (dividend companies only, no ETFs). For short term, I trade options. (and different method).

I don't use stops, as this is for long term. It always recovers looking at the past 140 years, so my expectation is that it will continue to do so (we have S&P500 since 1871; of the 25 negative periods in calendar years (excluding the 1930s), 100% of them recovered in 4 years or less from the bottom).

My method allows me to have a decent dividend return, as I buy it at a reasonable price. It might go down during crashes, but I'm not worried, as my goal is to live off the dividends and tax refunds for leveraging it. If it keeps going down, I have 4 chances to lower my average. The stock market goes higher for longer than it stays down, so eventually it will recover and I have a decent dividend return forever*

* I do look into quarterly results to ensure the companies I'm invested in are still making money. If they keep having big losses for too many quarters, I liquidate my position instead of risking having the dividend cuts. This method helped a lot with YLO, ATP and ARF, as I could get out before divs got slashed. BTW, charts gave the first red flags, as they were in a long term downtrend, where the sectors were not.

Rod