On line stock trading can be both a good thing, and a bad thing. . . The good thing is, when done correctly, you can profit heavily from good trades. . . The bad thing is, when done incorrectly you can drain your stock account faster than you can blink.
The ease of opening a stock account online and being able to purchase and sell stocks so simply is marvelous. Technology has come so far. . . but to make profits from trading, you must stick to a few rules. And they are. . .
#1: Don't buy into hype you hear on TV . . . If you heard information on TV that makes you want to buy the stock so badly. . . well, so did 10 million other people. Why does this matter? Because stock price is driven by supply and demand. . . the more people that want to buy, the higher the price goes. What do you think your chances are of buying that stock before the other 10 million people do? Not very good. . .
#2: Know your exit point(sell point) . . . If you buy XYZ stock for $10, then set your stop-loss point right away. Know when you want to call it quits on that stock, and set it up immediately. The reason? What happens if you go away from your computer for a day and you find out that while you were away, XYZ company put out a really bad PR (press release) and the stock dropped to $2 per share. . . you lost 80% of your money. But if you had put a stop-loss at $8, the chances are you will have lost a lot less than 80%. A good rule of thumb is to set your stop-loss at about 20% below your purchase price.
#3: In a crazy market like the current market, don't buy on value . . . Today's stock market is up and down up and down. Its risky to hold for too long now, unless you buy to hold for about 30 years, chances are you will lose. I suggest sticking to technical analysis when on line stock trading, because these days, its the only sure way to make some money in this market.
What is technical analysis?
TA is buying and selling based on market indicators, and it very well may be the most profitable way to trade. I have made profits on 13 of my last 15 trades, and my average profit is over 80%. Want to see how I do it? My swing trade techniques are found in part two of this article.
See part two at http://swingtradeguru. wordpress.com
I have had an exciting and successful run in the stock market over the last few months. . . Want more information? Check part two of this article at http://swingtradeguru.wordpress.com
Robert Crawley has been an internet and TV guru for over 15 years. He has been a very successful swing trader for over 10 years as well.