| Want to make money trading stocks online? If | | | | precipitously tend to keep dropping. Don't |
| you follow these five simple tips, you'll be | | | | step in front of a speeding train. Instead, |
| way ahead of the pack. | | | | find stocks which are healthily moving up and |
| | | | will keep moving up. Think of it not as "buy |
| 1) Listen to the charts | | | | low and sell high," but "buy high and sell |
| | | | higher." |
| You may have found a great stock, and it | | | | |
| could have the best fundamentals in the | | | | 4) Ignore the people on TV |
| world, but here's the truth-- that's not | | | | |
| enough! Even if a stock has a million | | | | There is no shortage of media personalities |
| fundamental reasons to go up, it's not going | | | | who love to recommend stocks. Follow their |
| anywhere unless people are buying it. People | | | | advice and you'll become rich, right? Wrong. |
| don't always act rationally, so you can't | | | | If you could make millions by following the |
| assume that a stock will behave as it should. | | | | guy on TV, everyone would be rich. You've got |
| That's where technical analysis (chart | | | | to do your own homework. You see, it's not |
| reading) comes in. By learning to read | | | | necessarily that the people in the media |
| charts, you can spot stocks that are poised | | | | don't know what they're talking about. They |
| to move up, or conversely, stocks hopelessly | | | | often do. It's that by the time that |
| headed down. Reading stock charts will allow | | | | information reaches you, it's too late! Think |
| you to find stocks which actually will move | | | | about it...there are professionals who spend |
| up, not just stocks you think should move up. | | | | all day looking for the next great stock to |
| | | | buy. Do you really think that by the time a |
| 2) Use stop losses | | | | stock pick reaches the general public on TV, |
| | | | the smart money hasn't already bought it? Of |
| No one is ever right 100% of the time. That's | | | | course it has, and by the time the little guy |
| just the nature of the game. Even the best | | | | buys himself, he's left holding the bag. If |
| stock pickers sometimes pick lemons, but | | | | you want to make money trading online, you've |
| that's not necessarily a problem. Picking | | | | got to think independently. Otherwise, you'll |
| losers, which is inevitable, is only a | | | | be behind the curve. |
| problem if you let them kill your account. | | | | |
| You absolutely must set stop loss orders | | | | 5) Don't overpay on commissions |
| every time you make a trade, otherwise you | | | | |
| may wake up and find your entire account | | | | Let's say you start trading stocks online |
| decimated. Remember, to make money trading | | | | with one thousand dollars. Now let's say |
| stocks online, you don't always have to pick | | | | you're paying ten dollars per trade. And |
| winners-- your winners just have to be bigger | | | | finally, let's assume you make thirty trades |
| than your losers. You accomplish this by | | | | per month. If you do the math, you'll see |
| always cutting your losers early, and then | | | | that you're doomed regardless of how good |
| letting your winners run. | | | | your stock picks are! People often get so |
| | | | excited about trading stocks online, they |
| 3) Don't step in front of a speeding train | | | | forget about all the money wasted on |
| | | | commissions. If you want to be successful |
| One of the biggest myths about making money | | | | over the long term, you have to find a broker |
| by trading stocks online is that you have to | | | | with low enough commissions for your trading |
| buy low and sell high. That's a very | | | | style. With some brokers charging as low as |
| dangerous way of thinking. Why? Because | | | | one penny per share, there's no reason to |
| people, searching for stocks to buy low, | | | | waste all of your money in fees. In this way, |
| eagerly buy stocks which are spiraling | | | | researching online brokers is just as |
| downward. They hope, often falsely, that soon | | | | important as researching stocks. |
| after they buy the stock, it will turn | | | | |
| around, go higher, and then they can sell for | | | | Keep in mind these five tips and you've |
| a profit. But ask any experienced trader and | | | | already set yourself up for success in |
| he'll tell you that stocks which drop | | | | trading stocks online. Good luck! |