Once you determine which business cycle the economy is currently in you can start researching for a trade. It is better to have some kind of a system in place that will be used ahead of each trade. Here is a uncomplicated five step formula to help get you started.
5 Steps to Investing Online:
1. Get a stock This is the most obvious and most thorny step in stock trading. With well over 10,000 stocks to trade a good rule of thumb to mull over is time of the year. For instance, as I write this, it is the beginning of spring. It would make sense to consider stocks that traditionally go up, or go down if you are bearish, at this time of year.
2. Fundamental Analysis Many short term traders may argue with the need to do any fundamental analysis, but knowing the chart patterns from the past and the news concerning the stock is pertinent. An example would be earnings season. If you are thinking about playing a stock to the upside that has missed its earnings target the last 4 quarters, caution could 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 tutoring.
Keep it simple when initially starting out, using too many indicators in the beginning is a ticket to a losing trade. Become very cozy using one or two indicators to begin with. Gain knowledge of their intricacies and you'll be sure to make better trades.
4. Chart your picks After you have placed a few stock trades you should be managing them properly. If the trade is intended to be a short term trade watch it closely for your exit indicator. If it's a swing trade, watch for the indicators that tell you the trend is changing. If it's a long term trade remember to set weekly or monthly checkups on the stock.
Use this time to keep up on the news, decide your price targets, set stop losses, and watch other stocks that you possibly will want to hold also.
5. The big picture As the saying goes, all boats rise and fall with the tide. Learning which sectors are picking up piles the odds 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. - 31970
5 Steps to Investing Online:
1. Get a stock This is the most obvious and most thorny step in stock trading. With well over 10,000 stocks to trade a good rule of thumb to mull over is time of the year. For instance, as I write this, it is the beginning of spring. It would make sense to consider stocks that traditionally go up, or go down if you are bearish, at this time of year.
2. Fundamental Analysis Many short term traders may argue with the need to do any fundamental analysis, but knowing the chart patterns from the past and the news concerning the stock is pertinent. An example would be earnings season. If you are thinking about playing a stock to the upside that has missed its earnings target the last 4 quarters, caution could 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 tutoring.
Keep it simple when initially starting out, using too many indicators in the beginning is a ticket to a losing trade. Become very cozy using one or two indicators to begin with. Gain knowledge of their intricacies and you'll be sure to make better trades.
4. Chart your picks After you have placed a few stock trades you should be managing them properly. If the trade is intended to be a short term trade watch it closely for your exit indicator. If it's a swing trade, watch for the indicators that tell you the trend is changing. If it's a long term trade remember to set weekly or monthly checkups on the stock.
Use this time to keep up on the news, decide your price targets, set stop losses, and watch other stocks that you possibly will want to hold also.
5. The big picture As the saying goes, all boats rise and fall with the tide. Learning which sectors are picking up piles the odds 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. - 31970
About the Author:
Are you finally sick and tired of having other traders take your money to do something about it?? Read how to trade stocks and for stock picks and swing trading strategies go to how to day trade
