Making fast money in stocks is not as hard as most experts lead you to believe, if you follow some simple but crucial rules.
Too many people attempt to trade stocks without any knowledge or experience which many times leads to losing all their investment money.
Even inexperienced stock traders can succeed gradually using small trades as they follow some guidelines that I have used to make fast money.
1. Trade only stocks with high volume- Over 1 million shares minimum, this will ensure that their is a slim bid/ask offer when you attempt to sell. When the volume is low the bid/ask offer will be large and you will take a loss just on the sale price on the trade.
2. Don’t buy a stock with a share price above $20 each -since many investors cannot afford to buy round lots over this price. An example of round lots are 1000, 10000 shares , etc, the price just gets to expensive for your average investor to buy them in that quantity. Another benefit is that you can buy more low price shares, the price increases will represent larger percentage gains.
3. Pick a stockbroker that charges no more than $5/trade, this is crucial since trading fees will make up a large part of your expenses than anything else will. This is the only expense that is guaranteed to be the same each trade so make sure its low.
4. Sell losing stocks when they drop more than 20% by putting in a stop loss order for every stock you buy, this will minimize your losses. Let the stocks that rise increase by 20%, then sell half of your shares and let the other half rise until you want to sell.
5. Buy only stocks that have lost at least 20% in one day since some negative news killed them. Use this to your advantage and buy at a discount, the next few days are usually a stable share price then they start rising again.
6. NEVER buy a stock that has a share price below $2.00 since one of two things usually happen. They get delisted from the stock exchange due to their low share price or they do a reverse stock split. A reverse stock split will take shares from you to increase the share value, example you have 100 shares before a 1-5 reverse split, you now have 20 shares, not a good sign.
If you follow these simple but crucial rules you have a much better chance at making money fast trading stocks. I have learned them through a lot of years of trading and I know they can work.
Using these tips will give you a big edge in your goal of making fast money in stocks.
