Stock Market Day Trading Advice

What are some good stock market day trading strategies? A good stock market trading strategy will vary depending on your outlook on how to trade in the stock market. If you are a day trader you may think that selling short is the way to go and you will use a margin account to double your winnings. If you are a little more long term you may look at setting sell points over a couple of days on a particular market sector. If you are very conservative you may only invest in blue chip stocks for the long term.

You need to decide what your investment goals are and how much time you have to reach them before you look for stock market trading strategies. What strategies work well for some people may not work for you depending on what you are trying to achieve with your investment portfolio. Strategies will also vary depending on how much you have to spend in the first place and how much you want to commit to any one kind of investment.

One thing that you need to keep in mind no matter what your stock trading strategy might be in the end is that you have to keep track of all the costs of trading so that you can truly assess what profits (or losses) you might be making to decide if your strategy is successful. You will have brokerage account fees, trade fees and management fees if you do not make the trades yourself. In addition, there may be interest and margin fees if you are day trading and dealing with futures, options or commodities. Keep in mind that there can be additional losses over and above your initial investment if you are trading on margin to increase your payout when you hit it big. Remember that you can double your money using margin accounts but you can lose many times your initial investment if the stock you are trying to sell short suddenly shoots up and you are hit with a margin call.

One of the most productive of all stock trading pieces of advice I have ever heard is to invest for the long run. When I was first able to put money into a 401(k) that my employer matched I put 25% in a high yield mutual fund, 25% in a standard capital gains fund and 25% in a conservative Treasury Fund. I found out quickly that the high yield fund made the most money per share for me as long as the market was moving up, but it provided the greatest loss when the market went down. I also realized that Treasury Funds are mostly a waste of time for anyone who wants to see profits in the near term.

The other great stock market day trading advice that I have heard is to invest in what you know or are familiar with. If you like a particular sector of business or are in a sector that you are confident is growing put your investment there because you will know more about the business and be able to spot trends more quickly than in an area you are not familiar with.

This entry was posted on Monday, May 17th, 2010 at 9:20 pm and is filed under Day Trading Systems, Stock Market Day Trading, stock trading strategies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.