Best time to press the trade button
When is the best time to press the trade button?
Every investor has their own process and here’s mine.
After I done my macro level research and zoomed into a list of selected companies, I put them through a framework and score them. Some of the factors include:
Mission statement: Simple, inspirational?
Moat: Does the company has moat?
Is there network effect?
What is the switching cost?
Is there low cost advantage?
Is there optionality?
Financial. How are the numbers. Look at the various financial ratio, PE, PEG, Cash, Debt, Free Cash flow.
Founder: Is the Founder still involved? What is the ownership of the company?
Rank the factors. Assigned a total score.
For me, the moat & the financials are equally important.
Next is the big question - When to press the TRADE button?
You can do all the research on companies such as $Apple(AAPL.US$, $Snowflake(SNOW.US$ etc, but if you do not press the trade button, it is only a paper exercise. So the best time to press the trade button is as soon as you can!
I do not try to time the market. Studies by $Bank of America(BAC.US$ have shown that it is a futile execise to time the market.
Every investor has their own process and here’s mine.
After I done my macro level research and zoomed into a list of selected companies, I put them through a framework and score them. Some of the factors include:
Mission statement: Simple, inspirational?
Moat: Does the company has moat?
Is there network effect?
What is the switching cost?
Is there low cost advantage?
Is there optionality?
Financial. How are the numbers. Look at the various financial ratio, PE, PEG, Cash, Debt, Free Cash flow.
Founder: Is the Founder still involved? What is the ownership of the company?
Rank the factors. Assigned a total score.
For me, the moat & the financials are equally important.
Next is the big question - When to press the TRADE button?
You can do all the research on companies such as $Apple(AAPL.US$, $Snowflake(SNOW.US$ etc, but if you do not press the trade button, it is only a paper exercise. So the best time to press the trade button is as soon as you can!
I do not try to time the market. Studies by $Bank of America(BAC.US$ have shown that it is a futile execise to time the market.
Once I have done my research, I would use a Dollar Cost Averaging (DCA) method to buy the company. I would split the purchase into 3 parts. In that way, I would not be timing the
market.
Stay discplined in doing in the DCA. For eg. After the first purchase, if you see that the stocks have dropped 20%, do not panic. Stick to plan. Trust the reserach that you have done.
I also use a portfolio allocation to manage my risk.
Stay invested in the company as long as the thesis remain intact. In the long run, good companies will continue to grow and be reflected in the share price. Focus on the business. Short term volatility is part of the game.
This is my view as a fundamental investor and hope it helps you. Another real master here in the community is
@HopeAlways
$Apple(AAPL.US$
$Amazon(AMZN.US$
$Alphabet-A(GOOGL.US$
Good luck!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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HopeAlways : Wishing you great success with your investment, with all the preparatory hard work you have put in and the wise selection of stocks for your stock portfolio.
Panda2102OP HopeAlways: Thank you senpai. I am always learning and tweaking the process, try not to lose $...
HopeAlways Panda2102OP:
earning_s : You do so much work before choosing a trade! I hope the hard work will pay off and make more money
Panda2102OP earning_s: Thank you. I think is partly driven by the fear of losing money. once you have done your research you can sleep better
Mikey_Vibez : Look for support when you go up, and pressure when you go down. Don’t get the general principle of this trend operation wrong.
Panda2102OP Mikey_Vibez: Good point. Thank u
Mikey_Vibez Panda2102OP: Very happy to communicate with you! Wish you happy trading