5 Simple Tips for Successful Stock Trading

timothyy

Newbie
6 0
Diving into the market can be overwhelming on multiple levels. Besides deciding to invest, there’s the question of how much to invest, what to invest in, how to do it, when to do it and … well … you get the point.

While many young investors will likely opt for a company-wide 401k plan, opening a brokerage account is another option. And whether you do business at TD Waterhouse, eTrade or some other brokerage, you can save money with every trade if you know the ropes.
See, savvy trading is just a matter of squeezing out an eighth here and a quarter there until your nickels and dimes add up to thousands and then tens of thousands of dollars over an investing lifetime.
This is especially true for those with a smaller pile of funds to invest, as each nickel and dime is a larger piece of your pie. And even if you’re looking to get into buy-and-hold investments, these tips and techniques I’ve picked up from my 30-plus years of dealing with stockbrokers can still help.
Take a look:

1. Never place market orders (those with no specified buy or sell price) before the opening of the trading day.

Strange things can happen at the opening bell, so you may find yourself paying much more than you intended on the buy side, or you may receive far less than you expected on the sell side. This is always a risk with a market order, but it’s most acute at the opening, when orders tend to pile up from traders reacting to last night’s (or this morning’s) news. If you must trade at the opening, protect yourself with a limit order.

2. The best time to trade “at the market” is usually in the afternoon, from about 1 to 2:30 p.m. EST.

By then, the whole country is at work, including the West Coast, and everyone has had a chance to digest the day’s important news. Market-shaking government statistics are almost always released in the morning.

3. Always check the “bid size” and the “ask size” for any exchange-listed stock before entering a buy or sell order.

A good real-time quote system will tell you not only the last price of a stock, but also the bid price, the ask price and the number of shares being bid for or offered at those prices. When the bid size is larger than the ask, it’s a sign of underlying demand for the stock , so don’t hold out much longer if you were planning to buy. By the same token, a large position on the ask side implies there are lots of sellers eager to get out. Don’t shilly-shally if you were intending to sell.
What if the bid and ask sizes are almost equal? That’s a perfect situation for entering a limit order exactly halfway between the bid price and the ask price. Chances are, your order will be executed right there in the middle
.
4. The best time of the month to buy stocks is around the 18th through the 22nd.

That’s when cash flows into the market (from pension funds and dividend reinvestment) tend to be at their low ebb, along with prices. The best time of the month to sell is during the first two and last two days. Also, you should be an aggressive buyer during the months of September and October, when the market has a strong seasonal tendency to bottom. Plan to do most of your selling in April and early in May.

5. For the most part, choose stocks to buy that are trading above $10 a share.

There are two reasons for this advice: (1) Stocks below $10 are usually quoted at larger percentage spreads between bid and ask (the buying and selling prices), so you need a bigger price increase to break even; and (2) companies with low-priced stocks are more prone to financial trouble, including bankruptcy.
I make an exception for closed-end funds, some of which may trade below $10 because management wants the share price to seem affordable to small investors. As a rule, though, most sub-$10 stocks have the odds stacked against them. Buy 50 shares of a $20 stock rather than 200 shares of a $5 stock.
 

morisco

Newbie
4 0
When trading stock it is important to check the bid size and ask size before entering a buy or sell order. To be successful it requires long process of market watching and practicing chart parttern recognition . Making money through trading is never easy but without a sound trading methodology. It can be possible by always look to reduce your risk first then look to increase your profitability.
 

timsk

Legendary member
7,598 2,374
When trading stock it is important to check the bid size and ask size before entering a buy or sell order. To be successful it requires long process of market watching and practicing chart parttern recognition . Making money through trading is never easy but without a sound trading methodology. It can be possible by always look to reduce your risk first then look to increase your profitability.
Hi morisco,
Shouldn't this read: Making money through trading is never easy but, without a sound trading methodology, it's impossible.
Tim.
 

kimjoseph

Newbie
2 0
This is some really good information and it is exactly what I was looking for - I have been trying to learn some things from various boards but I believe, this is something unique which I hadn't come across.

I have been looking over the internet for such information and I am glad that my quest has finally ended. One should be completely aware about the Stock Trading else people can take advantage of a person. I read an article regarding the Fortress Real Development who were planning to construct one of the tallest buildings and the investors were asked to buy their shares as their price would reach heights once the project is complete.

People were being looted as the developers withdrew their hand from completing the task, therefore one needs to be aware of the information on going in the market
 

drtro

Active member
216 21
From lurking various chatrooms, I've realized people make some serious mistakes that are easy to fix.

Never use indicators for "confirmations" or take advice from anybody who trades off indicators. A MACD or moving average has little to do with the direction in the market. Learn volume and price action. Understand WHY the MACD crosses over. A trading strategy that has confirmations off an indicator(s) with no price action, volume, tape, Level II, etc. is garbage. For example, "Hi, my name is Paul. I trade /CL. Here's my awesome strategy. My MACD crossed over with my RSI and the candles are under the 20 EMA. But I'm too stupid to realize today is Wednesday and inventory report is in 10 minutes. I don't listen to Obama either because I'm a republican. Those 52 week levels mean nothing. My MACD says this is going lower, I just don't know where to. Too lazy to understand where support and resistance is."

Never use passive orders to trade against the market when you're trading reversals or breakouts. Meaning don't set a buy order 10 cents under the current price when you're bullish. I see new people do this all the time setting at a passive order at the bottom of a confirmed reversal. If it even drops that much to fill, price action has likely failed and it's going to continue to go sideways or lower. They're either gonna miss out on the run or get beat. You don't need to trade the exact top and bottom to be profitable. Then I see people who miss out on the reversal or pullback short the first pullback/replacement just to get stopped out. If you are trading reversals and/or breakouts, either enter a market order on the confirmation after a closing candle, or set a passive order a few cents ABOVE to confirm the market is actually going to move that direction. Trading isn't bargain hunting.
 

Pat Riley

Established member
794 178
From lurking various chatrooms, I've realized people make some serious mistakes that are easy to fix.

Never use indicators for "confirmations" or take advice from anybody who trades off indicators. A MACD or moving average has little to do with the direction in the market. Learn volume and price action. Understand WHY the MACD crosses over. A trading strategy that has confirmations off an indicator(s) with no price action, volume, tape, Level II, etc. is garbage. For example, "Hi, my name is Paul. I trade /CL. Here's my awesome strategy. My MACD crossed over with my RSI and the candles are under the 20 EMA. But I'm too stupid to realize today is Wednesday and inventory report is in 10 minutes. I don't listen to Obama either because I'm a republican. Those 52 week levels mean nothing. My MACD says this is going lower, I just don't know where to. Too lazy to understand where support and resistance is."

Never use passive orders to trade against the market when you're trading reversals or breakouts. Meaning don't set a buy order 10 cents under the current price when you're bullish. I see new people do this all the time setting at a passive order at the bottom of a confirmed reversal. If it even drops that much to fill, price action has likely failed and it's going to continue to go sideways or lower. They're either gonna miss out on the run or get beat. You don't need to trade the exact top and bottom to be profitable. Then I see people who miss out on the reversal or pullback short the first pullback/replacement just to get stopped out. If you are trading reversals and/or breakouts, either enter a market order on the confirmation after a closing candle, or set a passive order a few cents ABOVE to confirm the market is actually going to move that direction. Trading isn't bargain hunting.
This post gets my FOS award of the week. Well done drtro.

From lurking various chatrooms, I've realized people make some serious mistakes that are easy to fix.
LOL. Sorry mate. I don't usually go for the jugular, but you've caught me in a transitional period. And I'm the righteous man. And Mr. 9mm here... he's the shepherd protecting my righteous ass in the valley of darkness. Or it could mean you're the righteous man and I'm the shepherd and it's the world that's evil and selfish. And I'd like that. But that **** ain't the truth. The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', drtro. I'm tryin' real hard to be the shepherd.
 

Splitlink

Legendary member
10,850 1,234
Diving into the market can be overwhelming on multiple levels. Besides deciding to invest, there’s the question of how much to invest, what to invest in, how to do it, when to do it and … well … you get the point.

While many young investors will likely opt for a company-wide 401k plan, opening a brokerage account is another option. And whether you do business at TD Waterhouse, eTrade or some other brokerage, you can save money with every trade if you know the ropes.
See, savvy trading is just a matter of squeezing out an eighth here and a quarter there until your nickels and dimes add up to thousands and then tens of thousands of dollars over an investing lifetime.
This is especially true for those with a smaller pile of funds to invest, as each nickel and dime is a larger piece of your pie. And even if you’re looking to get into buy-and-hold investments, these tips and techniques I’ve picked up from my 30-plus years of dealing with stockbrokers can still help.
Take a look:

1. Never place market orders (those with no specified buy or sell price) before the opening of the trading day.

Strange things can happen at the opening bell, so you may find yourself paying much more than you intended on the buy side, or you may receive far less than you expected on the sell side. This is always a risk with a market order, but it’s most acute at the opening, when orders tend to pile up from traders reacting to last night’s (or this morning’s) news. If you must trade at the opening, protect yourself with a limit order.

2. The best time to trade “at the market” is usually in the afternoon, from about 1 to 2:30 p.m. EST.

By then, the whole country is at work, including the West Coast, and everyone has had a chance to digest the day’s important news. Market-shaking government statistics are almost always released in the morning.

3. Always check the “bid size” and the “ask size” for any exchange-listed stock before entering a buy or sell order.

A good real-time quote system will tell you not only the last price of a stock, but also the bid price, the ask price and the number of shares being bid for or offered at those prices. When the bid size is larger than the ask, it’s a sign of underlying demand for the stock , so don’t hold out much longer if you were planning to buy. By the same token, a large position on the ask side implies there are lots of sellers eager to get out. Don’t shilly-shally if you were intending to sell.
What if the bid and ask sizes are almost equal? That’s a perfect situation for entering a limit order exactly halfway between the bid price and the ask price. Chances are, your order will be executed right there in the middle
.
4. The best time of the month to buy stocks is around the 18th through the 22nd.

That’s when cash flows into the market (from pension funds and dividend reinvestment) tend to be at their low ebb, along with prices. The best time of the month to sell is during the first two and last two days. Also, you should be an aggressive buyer during the months of September and October, when the market has a strong seasonal tendency to bottom. Plan to do most of your selling in April and early in May.

5. For the most part, choose stocks to buy that are trading above $10 a share.

There are two reasons for this advice: (1) Stocks below $10 are usually quoted at larger percentage spreads between bid and ask (the buying and selling prices), so you need a bigger price increase to break even; and (2) companies with low-priced stocks are more prone to financial trouble, including bankruptcy.
I make an exception for closed-end funds, some of which may trade below $10 because management wants the share price to seem affordable to small investors. As a rule, though, most sub-$10 stocks have the odds stacked against them. Buy 50 shares of a $20 stock rather than 200 shares of a $5 stock.

Good advice. I got caught, many years ago, with an overnight trade on a share that had news overnight. The price went up and down at an alarming rate at the open. Overnight news is quite common.
 

timothyy

Newbie
6 0
From lurking various chatrooms, I've realized people make some serious mistakes that are easy to fix.

Never use indicators for "confirmations" or take advice from anybody who trades off indicators. A MACD or moving average has little to do with the direction in the market. Learn volume and price action. Understand WHY the MACD crosses over. A trading strategy that has confirmations off an indicator(s) with no price action, volume, tape, Level II, etc. is garbage. For example, "Hi, my name is Paul. I trade /CL. Here's my awesome strategy. My MACD crossed over with my RSI and the candles are under the 20 EMA. But I'm too stupid to realize today is Wednesday and inventory report is in 10 minutes. I don't listen to Obama either because I'm a republican. Those 52 week levels mean nothing. My MACD says this is going lower, I just don't know where to. Too lazy to understand where support and resistance is."

Never use passive orders to trade against the market when you're trading reversals or breakouts. Meaning don't set a buy order 10 cents under the current price when you're bullish. I see new people do this all the time setting at a passive order at the bottom of a confirmed reversal. If it even drops that much to fill, price action has likely failed and it's going to continue to go sideways or lower. They're either gonna miss out on the run or get beat. You don't need to trade the exact top and bottom to be profitable. Then I see people who miss out on the reversal or pullback short the first pullback/replacement just to get stopped out. If you are trading reversals and/or breakouts, either enter a market order on the confirmation after a closing candle, or set a passive order a few cents ABOVE to confirm the market is actually going to move that direction. Trading isn't bargain hunting.

Hey Tanks For These Powerful informations (y)
 
 
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