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Learn How To Trade Stocks and Win

Learn How To Trade Stocks and Win


    

Learn How To Trade Stocks and Win

by Jim Banard

After you settle on which business cycle the economy is currently in you can begin researching for a trade. It is better to have some kind of a system in place that will be used before each trade. Here is a easy 5 step blueprint to help get you going.

5 Steps to Investing Online:

1. Locate a stock This is the most obvious and most challenging stage in stock trading. With well over 10,000 stocks to trade a good rule of thumb to ponder is time of the year. For example, as I write this, it is the beginning of spring. It would make sense to take into account stocks that usually go up, or slide if you are bearish, at this time of year.

2. Fundamental Analysis Numerous short term traders may disagree with the need to do any fundamental analysis, though knowing the chart patterns from the past and the news concerning the stock is pertinent. An example would be earnings season. If you are planning on playing a stock to the upside that has missed its earnings target the last 4 quarters, caution may well be in order.

3. Technical Analysis This is the part where indicators come in. Stochastics, the MACD, volume, moving averages, RSI, CCI, support levels, resistance levels and all the rest. The batch of indicators you choose, whether lagging or leading, may depend on where you get your instruction.

Keep it simple when first starting out, using a lot of indicators in the beginning is a ticket to a losing trade. Get very cozy using one or two indicators in the beginning. Discover their intricacies and you'll be sure to make better trades.

4. Follow your picks When you have placed a few stock trades you should be managing them appropriately. If the trade is meant to be a short term trade watch it closely for your exit signal. If it's a swing trade, look for the indicators that let you know the trend is shifting. If it's a long term trade remember to set weekly or monthly checkups on the stock.

Use this time to keep abreast of the news, settle on your price targets, set stop losses, and watch other stocks that you may want to hold as well.

5. The larger picture As the saying goes, all ships go up and down with the tide. Being aware of which sectors are picking up stacks the chips in your favor. For example, if you are long (expecting price to go up) on an oil stock and most of the oil sector is rising then more likely than not you are on the right side of the trade. Several trading platforms will give you access to sector-wide information so that you can get the education you need.

About the Author:
Are you ready to take your stock trading to the next level?? Read how to trade stocks and to make your trading account spit out money like a broken ATM machine check out how to day trade


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