Buying Low Priced Stocks

Buying Low Priced Stocks
By
www.CandlestickForums.com

Buying low priced stocks is
often how to profit when
buying stocks or trading
stocks, providing that the
stock prices go up.


Simply buying low priced
stocks does not necessarily
lead to profits as a low priced
stock may well be on the way
to bankruptcy.


For traders and investors to
profit from buying low priced
stocks the stocks must, at
some point, increase in value.


There are two ways to asset
the prospects of a low priced
stock.


Fundamental and technical
analysis both have their place
in helping the investor decide
on what stock to add to or
subtract from his stock
portfolio.


Both types of analysis are also
useful for stock traders.


However, the trader will want
to rely more heavily on strong
technical analysis tools such
as Candlestick analysis to
assess upcoming market
sentiment.


Fundamental analysis in stock
investing is typically
concerned with long term
investing and not short term
profits.


In buy and hold investing the
goal is to find a stock that will
appreciate over the years and
weather economic upheavals
and stock market crashes.


Intrinsic stock value is what
long term investor looks for. It
is the discounted value of
forward looking earnings.


This concept goes back to the
1930’s in the aftermath of the
1929 market crash and the
dark days of the Great
Depression.


An investor seeks to anticipate
the earnings that a company
will generate over the years.


He will look for a strong
product line and the ability to
add new products through
R&D, acquisitions, and an
acute sense of what the
consumer wants and will pay
for.

He will also look at the ability
of the company to contain
costs and to compete
effectively in the various
market sectors where it sells
its products.


In the case of the long term
investor, buying low priced
stocks has to do with a stock
being low priced in relation to
its long term prospects.


Technical analysis with tools
such as Candlestick stock
charts is largely the province
of the day trader and short
term investor.


Although a well chosen stock
may appreciate over the
years, the same stock will
often be the most profitable
at points of accelerated
market trends or a big market
reversal.

For example a downward
trending stock may benefit
from a new product
announcement or the
acquisition of a competitor
and reverse course.


It is not uncommon that most
of the capital gains that a
stock experiences in a year
will come in a month or even
days after a turnaround.


Buying low priced stocks for
the day trader has to do with
hourly and even minute by
minute stock price valuations.


Penny stock trading can be a
lucrative undertaking.


However, the fact is that many
low priced stocks are not likely
to appreciate in value.


Fundamentals may be
uncertain and hard to analyze.


It is often through careful
evaluation of technical
analysis indicators such as
Candlestick


pattern formations that the
trader can succeed in buying
low priced stocks in this realm
before they break out.


In other words it will be the
clear indication of market
sentiment that Candlesticks
patterns offer that makes
buying low priced stocks a
profitable undertaking.


Buying Low Priced Stocks

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Buying Low Priced Stocks