Most of us have some good ideas for stocks or ETFs we'd like to own, but we are not sure when to buy or sell. We can greatly improve our entries and exits by using very simple chart information. Here's a quick 3-step start:
- Go to the chart area of your favorite financial website (I like Yahoo Finance, but MSN is also good,) or your online trading site.
- Create a 1 year, daily chart with 20, 50, and 200 day moving average lines. (If you can handle a little clutter use both simple moving averages (NYSE:SMA) and exponential moving averages (NYSEMKT:EMA), which are a little more sensitive. Start watching your stock's behavior around these lines. Timely stocks above these lines will find support at the nearest line. Timely stocks below these lines will climb through them. Untimely stocks will do the opposite.
- I'll post some more simple, quick tips on using charts to improve your entries and exits soon.