Assuming that it both goes up 2% and down 2%, in that order, forever, there is no problem at all. However you have not said what you'd do if it went up 2%, you sold, it went up 2% again, you sold, and you kept selling until you had nothing left, and the market never went down to 2% below your last purchase.
Full Answer
Why do stock prices move on the bid and offer?
If someone buys those 100 shares, or if the seller cancels their order, then that order disappears, and the offer moves to the next available price at which someone is selling—let's say $90.25. The buying was great enough that it removed all of the shares available up to $90.95. That is how prices move. The same thing happens on the bid.
How are stock prices set?
Billions of shares of stock are bought and sold each day, and it's this buying and selling that sets stock prices. Stock prices go up and down when someone agrees to buy shares at a higher or lower price than the previous transaction.
Why does the stock price move so quickly?
The price can move very quickly if someone puts out a big market buy/sell order. A market order buys or sells every share, no matter the price until the order is filled.
What happens when you sell 200 shares of a stock?
If someone sells 200 shares to a person willing to buy 200 shares at $90.21, the bid at $90.21 disappears. If the next bid is for 300 shares at $90.20, and someone sells 300 shares (or more) at $90.20, then that bid will disappear, and the bid below it will be the new highest bid.
What happens when you buy a stock and the price goes up?
By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.
When a stock goes up should I buy more?
Start things off right by buying a leader once it goes through the proper buy point of a good base in volume that's at least 40% above average. Only buy more shares if the stock moves 2% to 2.5% above your initial purchase price. If it does, use 30% of your allotted capital for your second buy. Now you're 80% invested.
What does it mean when a stock goes up 2 points?
Key Takeaways. When you hear a stock has lost or gained X number of points, it's the same as saying the stock has lost or gained X number of dollars; one point equals one dollar.
Do stocks go up when prices go up?
Stock prices go up and down based on supply and demand. When people want to buy a stock versus sell it, the price goes up. If people want to sell a stock versus buying it, the price goes down.
At what percent gain should I sell stock?
20% to 25%Here's a specific rule to help boost your prospects for long-term stock investing success: Once your stock has broken out, take most of your profits when they reach 20% to 25%. If market conditions are choppy and decent gains are hard to come by, then you could exit the entire position.
What is the best time of day to sell stock?
Regular trading begins at 9:30 a.m. EST, so the hour ending at 10:30 a.m. EST is often the best trading time of the day. It offers the biggest moves in the shortest amount of time. Many professional day traders stop trading around 11:30 a.m., because that's when volatility and volume tend to taper off.
How do you know when to buy a stock?
7 things an investor should consider when picking stocks:Trends in earnings growth.Company strength relative to its peers.Debt-to-equity ratio in line with industry norms.Price-earnings ratio as an indicator of valuation.How the company treats dividends.Effectiveness of executive leadership.More items...
When should I sell my shares for profit?
When to Sell Stocks -- for Profit or LossYour investment thesis has changed. The reasons why you bought a stock may no longer apply. ... The company is being acquired. ... You need the money or soon will. ... You need to rebalance your portfolio. ... You identify opportunities to better invest your money elsewhere.
What is the best day of the week to buy stocks?
MondayThe upshot: Experienced traders often view Monday as the best day of the week to buy and sell stocks because of the time and pent-up demand since the last trading session the previous Friday.
Should I buy stocks when they are low or high?
Stock market mentors often advise new traders to “buy low, sell high.” However, as most observers know, high prices tend to lead to more buying. Conversely, low stock prices tend to scare off rather than attract buyers.
How do you know a stock will go up?
Topics#1. Influence of FPI/FII and DII.#2. Influence of company's fundamentals. #2.1 About fundamental analysis. #2.2 Correlation between reports, fundamentals & fair price. #2.3 Two methods to predict stock price. #2.4 Future PE-EPS method. #1 Step: Estimate future PE. #2 Step: Estimate future EPS.
How do you tell if a stock will open higher?
If the price is lower than the closing price from yesterday, you know the stock market is probably going to open lower. If the price is higher than the closing price from yesterday, you know the stock market is probably going to open higher.
Should I buy stock when its up or down?
Stocks should be no different. If you're already planning to invest, buying while prices are down can be a smart move. After all, “buy low, sell high” is a standard mantra for successful investors. However, just like regular shopping, it's not wise to buy things because they're on sale.
Should you buy stocks on the way up or down?
Generally, most investors think it is better to average down, that is, buy more shares of a company when its shares are on sale. The idea being to increase your share bet and profit handsomely when shares recover. This strategy can work, but more often than not you end up owning more shares in a problem company.
Should I buy stocks when they are low or high?
Stock market mentors often advise new traders to “buy low, sell high.” However, as most observers know, high prices tend to lead to more buying. Conversely, low stock prices tend to scare off rather than attract buyers.
When should you sell a stock?
Investors might sell a stock if it's determined that other opportunities can earn a greater return. If an investor holds onto an underperforming stock or is lagging the overall market, it may be time to sell that stock and put the money to work in another investment.