How to Buy IPO Stocks — and When | Onlyinvesting.info

In 2019, initial public offerings are HOT. But how do you trade them? Do you jump in on day one? Today, Tim Bohen covers how you can trade IPOs — and when you should trade them.

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Most companies start out with private funding. As they grow and expand, they usually need more capital. That’s when they go public. So they list shares to be publicly traded. It’s a way to sell equity on the public markets.

So now instead of asking a bank or a private investor for money, they’re going to the public market. Now, as an investor, you can buy a small piece of this company. You’d do that because you believe in it and you think the company’s value will go up over time.

In an ideal world, the company takes your capital to fund operations and grow. That would mean an increase in profits and the potential for investors to see a reward over time.

OK … That’s great for investors. But why would we want to trade IPOs? The mania! People love hot IPOs.They see these companies and their potential. They want in now. And that can create opportunity. You can learn how to ride the momentum as a trader.

But here’s a key point: When should you trade an IPO? I think smart day traders should avoid getting sucked into the hype and the mania. Take a step back. Be calculated in your approach. Attack at a good time.

Newbies tend to fall for the hype — they buy in on day one of the IPO. You almost never want to buy a stock on its first day one of being public … and almost never on day two. Look to the chart. And if the stock hasn’t been trading, there’s not much of a chart. So let the chart develop…

There’s often a day-one spike, but don’t pay attention to it. Most of the time, IPOs slam hard later in the day and gap down the next day. Or maybe they gap up the next day … That’s the thing: there’s no telling what can happen.

Think like a sniper. You want well-executed trades. Have a plan. Let the chart show you where this stock is headed and be willing to wait for the right time to trade. Look for the consolidation and then the break. Above all, be smart. Don’t let the mania suck you in.

#StocksToTrade #Stock Market #IPO
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*Tim Bohen teaches skills others have used to make money. Most who receive free or paid content will make little or no money because they will not apply the skills being taught. Any results displayed may be exceptional. We do not guarantee any outcome regarding your earnings or income as the factors that impact such results are numerous and uncontrollable.

You can lose money trading stocks. Do not invest money you cannot afford to lose. You understand and agree you will consider the important risk factors in deciding to purchase any of our products or services.