PostHeaderIcon Learn About Online Trading

Going into online stock trading is no laughing matter. It will require a significant amount of time learning the ins and outs of the business and you will always have something new to learn. In this type of business, everything else will rely on your technical know-how of stocks.

Add to that the complexity albeit real-time mechanism of the Internet and you have a formula for enough confusion to last you a lifetime-or until you run out of money for investment. Here are some short and practical stock tips that you can follow when doing trading online:

The strategy should be followed as a rule of thumb. If you’ve recently acquired stock and the value goes down the next day even though analysis reports show that the stock is still optimistic, try to buy more shares of this particular stock. You could simply consider the purchase an independent trade. Who knows, other people might clue in on the bullish reports by the analysts and decide to buy those stocks from you anyway?

Never ever trade stocks that have a large bid-ask spread. This is often the case when the stock looks very alluring. If they happen to catch your eye, try to purchase it at the price between the bid and ask. You may want to use the limit order in this particular case since a transaction cost of more than 3% will make any good strategy unsuccessful.

Another thing to note is if you are able to notice a particularly large positive price change of around 10% during the first or second day, you should sell this stock early.

Should you run into some headline news regarding the stock, it is favorable for you when bad news has come out already. You should not be essentially afraid of some bad earnings report or maybe analysts downgrading what you have in your portfolio. Stock will eventually go up anyway. Just make sure that the short seller will be able to close their positions and the bargain hunters in the neighborhood are always ready to take a risk

Finally, be sure that you’re able to buy equal amounts of shares of stocks. If you have stocks which are smaller in price, they will have a much larger risk. Be reminded always not to always invest heavily your money in small stocks. And most importantly, if the stocks are on a downtrend, be sure not to hold on to them


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