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Investing in the stock market using Share Cracker

Share ownership has become increasingly common over recent years and perhaps this is because it is so much easier to buy and sell shares and monitor their performance over the Internet. It takes just a few clicks of the mouse to check share prices and display various charts showing the performance of a share over the last day, week, month or year.

Although there are lots of great web sites that enable you to view stock market information, they can be tediously slow to use. Switching between companies is often slow with a Web browser, so Share Cracker is much more convenient for many tasks.

You may think that the charts in Share Cracker are very basic compared to the ones you can see on some web sites. However, most of the software on this site is written for myself and this is true of Share Cracker. It works the way I need it to work and I find it is a useful investment tool, so let's see how I use it to choose when to invest in the stock market.

Find the right company

Below is the sort of company I am interested in - a high street bank. It's as safe as houses and has a share price that rises and falls over the year. Look along the 460 line and on several occasions throughout the year the share price falls below 460p. I will add a company like this to the watch list in Share Cracker.

The low alarm will be set to 460, so that whenever the share price falls below 460p, the company will be highlighted in red. This is the time I buy shares in the company because the price is cheap. Of course, with some companies, the share price can keep on falling and could eventually be worthless, but what are the chances of this happening to a big high street bank?

Bouncing shares

As the year chart shows above, whenever the price falls too low, it isn't long before it bounces back up again. I therefore set the high alarm on this watched share price to 480. When the price rises above 480p, the alarm is triggered and the company is highlighted in green in the watch list. I then sell.

Of course, this requires patience because it can take months for the price to fall so I can buy and several more months before I can sell. This obviously isn't a technique that is going to make me millions overnight! However, it is much easier to make money on the stock market over a long period of time and day-trading is very risky.

Share Cracker is perfect for monitoring share prices in companies like the bank above. It has a share price that regularly rises and falls. I can therefore set the alarms to warn of low or high prices and buy or sell as appropriate.

Wait for the crash

The stock market has crashed on several occasions in the past and it seems likely that it will do so in the future too. Something happens, everyone starts selling and the share prices fall at an alarming rate. Looking at investing for the long term, one strategy you could use is to wait for a stock market crash and then to buy, buy, buy! Share prices always recover in the long term and buying during a crash ensures that you buy at a rock bottom price. You then just wait for the share prices to recover. A typical example is the stock market crash of 2000 when the dot.com bubble burst and the FTSE100 share index fell to about 3500. In 2007 it is almost double this and if you'd bought a spread of shares in 2000 you would have made a nice profit. Of course, you need to cash in those shares before the next crash, but when is the best time? That's a tough decision.

Don't lose your shirt!

Of course, how you invest in the stock market is up to you and different people have different strategies. Most investors will admit to buying into at least one company who's share price has plummeted and lost them a bundle, so be careful!