What is the best way to buy stocks for Longer Term Investment?
Here is a time tested proven idea. Buy strong stocks at cheap prices and hold them longer term. Booking partial profit at around 20% level. And letting profit run on the remaining position.
Easier said. And done. Using Superior Profit Map Template and Hop On Template.
On 14th Aug our USA Traders Community forum identified Whole Foods (WFM.O) as a Longer Term Long opportunity. How did they do that? From Sonar program they looked at stocks at Pendulum Low - that were creating base and holding their price. WFM.O was one of them.
Do we buy any strong stock at Pendulum Low? Not really, for Longer Term Buy, its good to have some idea of the stock. That way it is easier for the holder to hold it longer term. Whole Foods is a well know company in USA. And it fit that requirement of several of our traders.
Is that all? No. We need to see some signal that the stock is about to go up. In this case, in Hop On Template, WFM.O had both Standard and Fast Direction lines tilting up. And on 14th Aug, Flow Candle color turned bright green. Indicating a potential Long opportunity on that day.
That was the first tenet of Superior Profit Way of Trading Profitably: "Using Simple Rules to Enter Trades".
So, one was ready to go Long with WFM.O.
Next decision was to use Call Options or buy the Stock?
As WFM.O was making a base, it was probable that it will move sideways for a while. We would not know. As it was not trending upward fast, it was better to stay away from Options which expire value over time.
That lead our traders to suggest WFM.O as a Longer Term Stock Buy in the Community forum.
That was the third tenet of Superior Profit Way: "Sharing Trades in the Community".
WFM.O never fell below the range - if it did, it would have triggered and exit on the Longer Term Stock position.
Instead, it showed a few Bullish Headwind. And then gaped up today with more than 12% gain.
The position has now more than 28% profit. And our trades would likely book partial profit. Like a disciplined trader. And let profit run on the remaining position.
And yes. That was the second tenet of Superior Profit Way: "Booking Profit at Pre-Defined Price Level".
Trade Profitably - no reason not to do so !
Citizen of Main Street.