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01 October 2010 ~ 0 Comments

Getting to Understand Stock Styles to Make Profits!

There are many people who think of entering the stock market, many of whose concerns are what to decide and what stocks to buy. This is very common feeling among people who are new to stock markets. They are all looking for that $ 12 stock, which is going for $ 200. They will take stock tips for almost everyone, such as gardeners, taxi drivers, or even employees.

The problem is that there are many things that are not considered. The first is his personal psyche. The fact is that if everyone has received the recommendation of actions by a person with more experience, all benefit from the different levels of the same population. This is because some of us to plunge into investment, some of us think about this for a while, and some might get in too late. Besides, we all sell the position at different times. Some of us make a small profit, but fast, others take a greater profit, some of us to keep the gain at a loss.

What does it mean that we all have our own style of stock trading is best suited to our personality. Let us look at some of the three profiles in traditional trade. The first style is the one extreme is the long-term investor. These operators are looking for a stock; they earn them a huge profit. Are stocks-marketing the long-term trend? They give each location is quite remote and generally set the stop loss wider than most dealers. Characterized by a trader or a long-term trend of the pilot is that to win their share of the market is generally very low, about 20-35%, but expect that the positions of one or two to win, they earn each year to find more than enough to compensate all the losers. The long-term investors are very patient and persistent; in general, take a long position in a bull market.

The second style in the middle of the trading range is swing trader. These traders seek to profit from swings those stocks more than a few days or even weeks. They occupy positions over a month or more, but not very often. They throw themselves into the positions they expect to benefit immediately. And when they see a profit, they lock it with a trailing stop. Often, swing traders to sell half of their positions to lock in a tidy profit, and leave the other half running. Swing traders usually have a winning percentage of around 45-60% and are known for cutting losing positions quickly. To succeed, the amount won by winners must be about two times more than they lose their losing trades. Swing traders should have clear rules of negotiation before taking any positions. They must be disciplined, because this style of trading is mentally more difficult than trading in the long term. One advantage they have is that swing traders can benefit from increasing or decreasing stocks.

Trading rules should be well tested and well-defined exchange defective can lose all the gains of a whole month. Needless to say, day traders are mentally strong, because this style of trading is by far the most stressful. Both rising and falling markets and their main advantage is that they have limitations and do not hold positions overnight.

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