Ciation as in appre·ciation, which is what you want to see happening to the balance in your stock portfolio. Let us be your guide through the stock market maze.
There is nothing more frustrating for you as an investor than having a stock price begin to fall immediately after you purchase it. Especially if at market closing your purchase price was the high of the day. If the price continues to drop the next day you may become susceptible to a panic sale. Then if the stock price recovers after you sell it then your frustration is made complete. You can't repeat this sequence very many times before your investment psyche is thrown out of sync.
The solution is to remove emotion from the investment equation by choosing the best stock for your investment style, and using the proper metrics to set up your trade entry and exit points. How to use our metrics to identify the best stock choice for your trading style is discussed in another topic. To determine the proper entry and exit points use the following price and market interest metrics.
The indicators above are strictly related to price movement and can help to identify where a stock's current price is within its current fluctuation. Expectations for price movement can be derived from the current price position and trend indicated by the metrics above. Use of the quality indicators shown in the next section can add increased confidence in a stock selection in cases where the price doesn't initially move as expected. With the level of confidence these metrics give you a determination can be made as to how long to wait for the stock to move in the anticipated direction before exiting.