When it comes to trading stocks online, it’s not about how hard you work. It’s about knowing exactly what to do, and putting that knowledge to work.
Here are ten powerful tips for online trading success …
1) Choose Your Trading Style Carefully. Give plenty of thought to what kind of online stock trading you want to do. Would you prefer day trading, where you close out every trade at the end of each day? How about short-term trading where you are in a position several days at a time? Maybe you’d rather be a weekly trader or monthly trader. Though you can always change your mind, it’s wise to have a clear idea of the style of stock trading you prefer BEFORE you start.
2) Match Your Trading Style To Your Lifestyle. Your choice of trading style is especially important from a lifestyle perspective. Day trading usually means you will be at your computer for hours at a time. Longer term online stock trading doesn’t require as much attention. As a rule, the shorter the time frame the more intense the trading.
3) Select A Broker That Matches Your Trading Style. The type of online stock trading you choose to do will determine the type of broker to use. Day traders need high-speed direct access technology. Short-term daily, weekly, and monthly traders can use less sophisticated discount brokers. When it comes to broker fees and other costs, day trading is the most expensive.
4) Use A Low-Risk High-Reward Trading Method. Stock trading involves risk. Most people inflict serious damage to their trading account before they learn how to win consistently. Though it may not seem glamorous, risk management is essential for successful online stock trading. The only way to get the reward is to control the risk.
5) Make Sure Your Trading Method Works in All Markets. The stock market doesn’t just go up. It goes down too – sometimes for months or years. Use an online stock trading method that takes advantage of both down-markets and up-markets.
6) Trade The Best Stocks. Superior stock selection takes advanced skills and extensive research. Unless you are extremely skilled with lots of spare time, it’s usually best to seek the advice of a professional. Avoid big brokerage firms and mutual funds. Facts show that most of their trading “experts” end up losing money.
7) Know When To Sell Your Stocks. Everyone focuses on what and when to buy stock, yet few ever consider the best time to sell. Paper profits only become real money when you convert them to cash. Don’t let your stock gains disappear due to neglect. Plan ahead. Before you get in, always know the specific conditions that will signal when it’s time to get out.
8) Check Your Winning Edge. A “winning edge” consists of the favorable factors that set winners apart from losers. You must have a reliable advantage to consistently make money trading online. Ask yourself – “What factors give me an edge?” Be specific. If you aren’t sure, you probably don’t have an edge. The only way to know is to analyze your methods and measure your results.
9) Invest in a good online stock trading education. Surveys show that 9 out of 10 investors believe their chances of winning are “above average” yet more than 80% of them actually lose money. This is simply because they don’t have the specific information needed to win. As we say at RightLine, “If you think education is expensive, try ignorance.”
10) Associate With Successful Online Stock Traders. Online stock trading presents unique challenges. Unlike traditional stock trading, there is no live broker to help you along the way. If chosen carefully, experienced online traders can be among your best trading resources. You may even wind up with a good friend!