Trading Stocks

We offer systems and strategies for trading stocks in a tough market.  We have the experience to help you conquer the world of stock trading.  Simple and straight-forward, trading stocks is the best way to get your feet wet in the world of investing. The methods are many and varied, but we’ll talk about the three most popular ways to trade stocks. So, let’s get started – this won’t take very long, I promise.

There Are Right and Wrong Ways of Trading Stocks

Different Types of Stock Trading

  • Long-Term

The long-term “buy and hold” method is the oldest and most used to trade stocks. You could spend ten years reading books by proponents of this method. It’s tried and true, so long as you have the patience to wait while trading stocks. This just means that you buy and hold stocks for a long period. How long is long? At least a year and probably much longer.

  • Day Trading – Scalping

This is my style. Day Traders profit from small moves (up or down, makes no difference). The point is, it’s short-term and the desire is to accumulate gains from many quick trades that scalp small profits. Of course, you have to pay the cost of more commissions, but it’s the net after expenses of more wins than losses that is the goal. When the day is over, the trades are over and tomorrow the game begins once more. The only way to get the experience required for proficiency is to practice paper-trading in simulation. You need focus that can only come from planning and practice before you start trading stocks.

  • Swing Trading

This is the middle ground method – somewhere between long-term and day trading stocks. Usually if you swing trade, you hold your position for a few days or weeks. Swing traders are the ones who use all those technical indicators and drive everyone nuts with their constant analysis of all possibilities.

Which method you choose is dependent upon your individual style and how much effort you want to put into trading stocks. If you are busy with family and career, then long-term stock trading is probably for you. If you like excitement and anxiety, then you just might be a stock day trader. If you are the middle-of-the-road type, you’re more than likely a swing stock trader.

Regardless of which stock trading method you decide to use (maybe all 3?) you must get the knowledge you need to make good decisions. After all, whether you lose your money in one day or if it takes a year, you still lost it, didn’t you? We’ve all been there, but you can overcome the negative side.

Things You Need To Know To Profit From Trading Stocks

  • What is a Stock

When you buy a share of stock, you are purchasing a small piece of that company. Stocks are called shares of the business and the purchase of those shares is known as trading stocks.

  • Stock Types
  • Common Stock

When you check on stock prices, the information you receive is on common stock, the usual type of shares held by investors.

  • Preferred Stock

As owner of a piece of the business, you receive dividends (if they pay them). That’s the major difference between preferred stock and common. Preferred stockholders receive dividends first when trading stocks.

  • How to Trade Stocks

There are different type orders you place with your broker to invest in trading stocks. Let’s just review some of them:

  • Market Order

This is the most common and quickest way to buy or sell stock. You place a market order and almost instantly a buyer or seller is found for you. You are saying that you will accept the amount that is currently the market price. It’s easy, but you may not get what you want. Things happen fast in the market and you might not wind up where you wanted to be trading stocks.

  • Limit Order

Now, this will cost you more in broker commissions, but your trade will not be completed unless you receive the exact amount you indicated in your limit order. This can prevent you from getting filled, but at least you didn’t get a surprise.

  • Stop Loss Order

I think this is the most important of all orders. You place a stop loss order at a price below the current market. That way, if the market makes a quick drop, you won’t be caught in the “falling knife,” when prices plummet and you are left in the dust trading stocks. It’s sort of an insurance policy reducing your risk in your trade and I believe it is vital to use stop loss orders.

  • Trailing Stop Order

Now the beauty of this order is that, while like a stop loss order, it gives you protection, but it’s protecting your gains instead of limiting losses while trading stocks. If your trade is moving along and you’ve made some profit, you want to protect that, and a trailing stop order will do that trading stocks. As the name implies, it trails along as the price goes up. Your pluses continue to add up. Ah, it’s a beautiful thing.

  • Day Order

Simply said, this order is only good until the market closes. Tomorrow you will have to place it again before trading stocks again.

  • Good Till Canceled Order

Simply said again, this order is good till you cancel or change it.

If you properly prepare and gain confidence, you can trade stocks like a pro and I hope you do. Trading stocks doesn’t have to be difficult. Remember that becoming a successful investor doesn’t happen overnight. But with time and determination you can certainly become profitable at trading stocks.

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