It almost does not matter what you buy. If the market in general goes down, it is likely that what you have bought will also go down. If the whole market goes up, your shares will probably go up, and you'll earn money.
The idea is to buy when stocks are cheap, when the market in general is cheap .
Let's see how to do to know if it is a good time to buy or not :
In our example, we are going to focus on the assumption that you want to buy shares in one or several strong company
We want to wait until the market is cheap and buy at that moment. When it becomes expensive, we will sell the shares.
Later, I explain how to get this graph, now look how simple it is to know when to buy and when to sell.
To this graph we have added below a technical indicator called stochastic. This indicator can tell us if the price is expensive or cheap (which is not always the same as high or low).
. If the stochastic is below the green line (20), the market is cheap . It is a good time to buy
. If the stochastic is above the red line (80), the market is expensive . It is a good time to sell .
. Between the green and red lines is a bad time to buy or sell, whether or not you have shares. Do not do anything .
Of course, the worst thing of all would be to buy when it's expensive and sell when it's cheap.
