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When To Look At Stock Price
When to look at stock price varies with whether one is interested in long term investing or day trading. The day trader follows stock prices by the day, hour, or minute in order to profit from stock volatility and market volatility. When to look at stock price for a long term investor is after all fundamental analysis has been done. When a long term investor wants to add to his stock portfolio he will look for stocks with a margin of safety and intrinsic stock value. Picking stocks that look to be long term investments the long term investor will then look at the price to earnings ratio, price to sales ratio, and other measures of whether a stock as priced low or to high. Both investor and trader make profitable use of Candlestick analysis in anticipating market sentiment driven price movement. Whether one is planning on holding a stock forever, or for a minute or two, buying at the bottom of a price cycle is profitable and is what the use of Candlestick pattern formations allows one to do.
Today’s epitome of the long term investor is the legendary Warren Buffett. The so called oracle of Omaha is known to spend his time evaluating stocks for their long term growth and profit prospects. When he has decided that a company’s combination of expertise, product development, sales, market share, and management competence is what he is looking for, that is when to look at stock price. This approach is the opposite of what many investors do. It is relatively easy to screen for a low price to earnings ratio, low priced stocks, and the like.