These stock trading tips, especially for new stock traders, can help you improve the performance of your trading results as well as help you stay away from making some major trading mistakes.
Get To Know These Tips On Stock Trading
Tip 1. Find a trading style that will best match your trading personality to have the best chance of becoming a successful trader for the long term
⚐ Day Trading, Swing Trading, Trend Trading or Position Trading
Tip 2. Having patience is a virtue to help bring about trading success by being able to trade on your own terms.
⚐ This is worth its weight in gold (as legendary trader Jesse Livermore proclaimed)
Tip 3. Wait for the trade to set itself up according to the rules of your trading plan
Tip 4. Seek trading opportunities having tight bid-ask price “spreads”
⚐ Especially for day trading and swing trading. Liquid stocks will generally have tighter “spreads” and are easier to get faster executions compared to illiquid stocks
Tip 5. Make sure there is sufficient trading volume on a daily basis
⚐ Generally having over 1 million shares traded per day is a good place to start
Tip 6. Run stock scans to filter trading prospects based on your trading criteria and outlook
⚐ Use technical analysis and (or) fundamental analysis
Tip 7. Trade liquid larger-cap securities rather than illiquid smaller-cap securities
⚐ Especially for day trading and swing trading where you can maneuver in and out of these securities quicker
Tip 8. Identify trends having big enough price swings to capture shorter-term tends within them. Go after the “sweet spot”
⚐ Especially for day trading, swing trading and trend trading
Tip 9. Get enough price history to identify strong support and resistance levels on a chart for the time frame you are trading
Tip 10. Don’t trade off hyped information or rumors. You could lose big doing this!
Tip 11. Having trading involvement by institutional traders
⚐ Helps to provide trading interest for producing large volume and liquidity
And finally – What May Be The Most Important Trading Tip –
Tip 12. Establish strong risk management rules and follow them with discipline!
⚐ To control trading losses and protect your most precious asset – your trading capital!
Remember, don’t rush and chase trades. Be picky when selecting among different trading prospects. If it doesn’t look and feel right to you then just move on to the next trading prospect without hesitation.
The goal here is to select only the best trading prospects that are right for you in accordance with your trading plan. There will be enough great trading opportunities constantly popping up all the time – so learn how to be patient and let the best ones come to you.
Caution Note: it is generally not advisable to swing trade a stock during the time that a company is going to announce their quarterly earnings because that stock’s price could become very volatile (even “GAP” in price) if the earnings either beat or disappoint the security analyst’s expectations. This is like “rolling the dice.” You could win big or worse yet get hammered with a huge trading loss.
