A stock trading in narrow band can easily grab attention of smart investors. You can use these profit making tricks to trade stocks in very tight range. However, if you don’t know how to trade such equities, you may have to bear huge losses or miss out an interesting opportunity.
Stocks usually trade in a narrow trading range for various positive & negative reasons. A given stock may trade in very tight range from few days to few weeks to even few months.
This chart pattern may occur anytime irrespective to overall trend of share markets or stock index. A tight trading pattern may end with either a bullish or bearish breakout anytime. Here are 10 money making tips to trade securities in very tight range:
[You can also watch an exciting video on this post from GetUpWise channel on YouTube.]
(1) Make Your Positions With Patience
It is one of the most important profit making tricks to trade stocks in very tight range. Patience is often considered as the best way to reap real benefits from a stock position.
According to a study published in Fool, you can get poor in hurry rather than getting rich. You can’t identify & analyze a stock in a hurry.
It usually takes few days or weeks or even months for a stock to form a strong base or resistance. Once it is formed, stock is ready technically for a bullish or bearish breakout.
However, it is usually observed that new & unskilled investors often buy or sell shares in a hurry. They make positions on the basis of speculative news, stock recommendations, public interest, as well as current price as compared to its historical prices.
Whenever a share is trading in very tight range, you should make your positions (either buy or sell) wisely. It is better to be safe than sorry. You should provide enough time to a stock to form a strong base or resistance before breakout.
Image Source: FxKeys