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6 Secret Stock Trading Tips of 2019

Investing in the stock market can be pretty intimidating. There’s a lot that you need to learn and understand about the markets.

That’s probably why about half of all Americans own stocks, either directly investing in the market or as part of a mutual fund or 401(k).

If you’re looking to become a direct investor, how do you know what to do? You need to know the top trading tips that investors rely on to make a killing on the market.

Read on to learn the top trading tips that you can turn into cash.

1. Learn as Much as You Can

The reason why many people stay away from the stock market is that they don’t understand it. It doesn’t make sense to throw money away on bad stock tips. You may have better luck at the racetrack or the casino.

You want to take the time to learn as much as you can about the stock markets before you invest. You can start by learning the different markets and find out the difference between NYSE, NASDAQ, IBEX, and FTSE.

You can also learn about what to look for in a particular stock and what makes the markets go up or down.

Once you get a basic understanding of the markets and how stocks work, you can try your hand at a stock simulator or sign up for a practice trading account.  

These are things that you can only learn by doing and making mistakes. When you use a simulator or practice account, you can make mistakes and learn from them without losing your shirt.

2. How Much Risk Can You Withstand?

You need to do a thorough risk assessment when you invest in stocks. Not just of the stocks you invest in, but a personal risk assessment.

Stock trading should be fun and it shouldn’t be the thing that keeps you up at night. Before your trade, you should know what your exit strategy is of each stock you invest in.

Let’s say you invest in a stock that does poorly. It takes a beating because of its quarterly report and investors are looking to sell fast. If you join them, you’ll lose a ton of money.

Do you join them or hold on to the stock? That’s the type of risk assessment you need to do when you play the markets.

You may have different strategies for long-term trades and short-term trades. There’s no real rulebook here because everyone has a different risk tolerance threshold.

3. Don’t Try to Get Rich Quick

This is one of the most important trading tips. There are plenty of promises in the various markets. Someone at some point will promise you a way to get rich quick.

Don’t take the bait.

There is no such thing as getting rich quick. It takes a lot of work and learning to get to the point where you’re making money. If you want to make your money work for you, you’re better off hiring a wealth manager who can put your money in high-risk funds.

It’s a type of situation where the risk is just a great as the reward. Either you lose a lot of money or get a big payoff.

It’s up to you to rely on the skills and experience that you built up to determine how you’ll make money trading.

4. Don’t Forget About Taxes

Every investment has tax implications. If you are to cash out on a trade, you have to know if that’s going to be taxed as income or capital gains.

Let’s say you have a 401(k) that you cashed out. The amount that you receive will count as income. You can’t hide that amount from the IRS because the fund that held your 401(k) will notify the IRS. You would then be in big trouble for possible tax evasion.

Educate yourself about the tax consequences of stock trading. You should also employ the services of an accountant and a tax attorney. Both can give you valuable advice to pay your taxes, but never more than what you owe.

5. Have a Diversified Portfolio

There is so much more to investing than just trading stocks. There are different markets, trading methods, and things to invest in.

An investment is money that you put into something that you expect to bring a return on investment. For a business, that investment might be marketing or a new employee.

That type of mindset broadens your approach to investing. You can invest in startup businesses, commodities like oil and gas, and so much more. Investors like Courtney Sarofim have this broad approach to investing and are successful at it.

6. Don’t Rely on Talking Heads for Information

There is a ton of information out there on the stock market. There are TV networks dedicated to investing. These TV networks have 24 hours of time to fill every single day.

Similar to cable news networks, that pressure to fill up the schedule can lead to just about anyone having an opinion on TV. While they may be entertaining to watch, you shouldn’t rely on them solely for investing tips.

You need to dig deeper beyond talking points to find the stocks worth investing in. You’ll want to read the 10-K reports and quarterly earnings reports. Find out if a company plans to do a stock buyback or not.

These are the top things that you should be focused on when you trade. Remember, everyone is probably watching the same talking head on TV that you are. A lot of them are going to take that advice, whether it’s good advice or not.

The Top Trading Tips to Be Successful

It’s easy to treat investing like a game. When you invest in stocks, you need to make sure that you are prepared to do the hard work to be successful.

The trading tips presented here will help you be successful and stay sane in the process.

Do you want more great articles? Check the blog often for tips to help you in your finances or start a business. 

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