This is how you determine the best time to start
Recognizing not only the trend, i.e. the direction of development, is crucial to trading successfully on the stock exchange. Finding the perfect time to start is at least as important. The right timing for long trend movements from several months to years usually offers scope for minor course corrections if the timing is not optimal. Making investment decisions based on short-term market movements that happen over a period of weeks, days or even within a day (intraday) is more of a challenge. For many investors, clear rules for determining the right timing have proven their worth.
wikifolio trader Carsten Schorn aka “Abbakus” is a bank clerk and a passionate day trader. As a graduate computer scientist with a focus on business administration, stock exchange and automated trading systems, he follows a very systematic approach with clear rules, in which trading is only carried out when the corresponding signals and indicators turn out.
The best time to start
The best possible entry point is clearly when a share is just beginning to soar. For Carsten Schorn, the decision to open a position depends on several components. Basic indicators can be company reports (good company figures, takeovers, special dividends, squeeze-outs, the entry of a major shareholder) or high turnover of the respective stock on the stock market, which far exceeds the average daily turnover. These are usually signs that either a trend is emerging and many market participants have the same idea, or that a single major force is stepping in.
The hard nut to crack: the exit time
The aim when selling a share is to realize the maximum possible profit or to limit losses as quickly as possible. Often, when selling shares, one tends to let oneself be guided by emotions. It is sold prematurely or held on to the stock for too long. As with a purchase, however, the decision to sell should be preceded by a careful analysis process, which should include the same factors as those used to determine the time of entry. A stock market adage sums up the procedure: Sell a share as soon as you would no longer buy it.
This is how Carsten Schorn determines the right time
As soon as Carsten Schorn notices the first signs of a trend reversal, he checks other indicators in order to make his trading decision for or against buying or selling a particular share. These include, for example, the general market development, current news about the company, fundamental key figures such as equity and a technical chart analysis with regard to the potential of the share.
For Carsten Schorn, the time is also one of the decision-making factors. As a day trader, Carsten Schorn gets an idea of whether a stock that has fallen has time to recover on the same day or whether it can maintain current gains until the end of the day.
In his career as a trader, Carsten Schorn has proven again and again that market feeling and experience also count in addition to “hard” indicators or facts and good timing. His tip for investors: “You can improve relatively quickly in this area if you have a basic affinity with the stock market and trade regularly. However, one should always keep in mind that the stock market is unpredictable to a certain extent. There is no simple rule for entries and exits that is always to be applied in the same way.”
Look over the shoulder of Carsten Schorn!
Take a look over Carsten Schorn’s shoulder and see for yourself how he uses a great deal of finesse to achieve the right market timing in his wikifolio “Abacus” is working.