Capital Management Services-10 Effective Stock Trading Strategies Stock markets are excellent at messing with two of our most powerful emotions, fear and greed. They do this because trading stocks is a zero sum game. Consequently, professional market participants will engage every trick in the book, to make sure they are on the right side of the trade. Accept you will never know as much about the markets as professional traders. Never forget this, but do however, try and mirror their actions. In other words, do not argue with the market, as this can become extremely expensive. For more guidance, you can opt for Capital Management
Services which can provide you a proper guide to investing in the best stocks to get high returns. I am going to keep this as simple as possible, not because you are stupid, but rather because our capital markets, of which stocks forms part, are deeply fragmented and a complex beast.
Trade As Early As You Can By becoming an active market participant in your younger years, you can take full advantage of compound growth. Learn to Hand Sit Never feel obligated to trade all the time. Pick your entry and exit points with precision in high volatility trading sessions. In other words, never force a trade. Moreover, control your emotions by finding a way to impose artificial autism. Yes, learn how to become stone cold without any emotional interference.
Low Latency Price and News Feeds
Capital Management Services-10 Effective Stock Trading Strategies For day traders and scalpers in particular, it is crucial you have access to market moving information as quickly as possible, in addition to accessing the latest and best market price of a stock. Delays in both of these is an instant and unnecessary handicap. Avoid Penny Stocks These types of stocks are often highly illiquid and therefore difficult to sell. Also, the bid – ask spread on illiquid stocks is always far greater than the spread on liquid blue chip stocks. Finally, penny stocks often find themselves becoming de-listed and thus worthless.
Knowledge Is Power Keep up to the second with the latest stock market news and events, the economic outlook and central bank interest rate plans. Consistently, monitor major economic calendar events and macroeconomic factors. Start Small Stick to just a few stocks as sourcing market entry opportunities is far easier just with a few stocks. Time Your Trades Learn to recognize patterns and time your entry and exit points accordingly. On the opening bell you will normally see above average volatility.
Mid day tends to be not so volatile, and as we edge towards the closing bell, volatility will invariably tick up again.
Capital Management Services-10 Effective Stock Trading Strategies
Set Aside Funds Always assess how much capital you are willing to lose on any one given trade. Never trade what you cannot afford to lose. Mitigate & Manage Risk When you are trading stocks, you are essentially trading two things – debt and risk. It is crucial you learn how to reduce any of your trading positions exposure to market performance risk. The best tool in the box to use are trailing stop – loss orders. Engage them on every buy order executed.. Three Months Max Never leave a trade open for longer than three months, as after this period too many variables and unknown factors come into play. These are a important strategies, albeit basic and self – explanatory, nevertheless stick to them when you are formulating and implementing your own trading methodologies and never be fooled by market hype.