Category Archives: How to Trade

7 Penny stock trading tips (Part 2)

We continue listing our tips on how to trade with penny stocks. And the tip #4 is keeping a journal.

A trading journal is a great tool for writing down all the moves that were done by you. The results of the operations should be fixed there as well. This will be a sort of diary that teaches you how to trade with profits and which strategies to implement for the future.

Such a journal will provide you with consistent profitability. It’s the most precious skill for any stock trader. In the future, you’ll get an opportunity to analyse your past experience and to improve your trading.

5.Take care of yourself

Improving the trading skills is a number one goal for any trader. But your body and your health are no less important, than your profits! That’s why you should not skip healthy eating, exercising and enjoying the life with your beloved ones.

Schedule your daily routine in a way that it could help you remain fit and healthy, not just staying focused on trading.

6.Spend time with your family

You should always remember that trading is just your job, not a part of your life. People around you, your family and close friends – they should be thanked for everything they’ve done for you. So, when you think of the way you are going to spend your free time, don’t forget about them.

7.Invest in education

Remember, education is still the only way to increase your earnings and enter the next level. So, never stop investing in your education. This will be the really profitable investments of yours!

7 Penny stock trading tips (Part 1)

A lot of people get interested in penny stock trading. They believe in the promises of the penny stock trading brokers, telling unbelievable success stories.

In this article, some real tips will be given. They will help you avoid spending both your time and money on making the wrong decisions while trading.

1.Don’t believe to everyone

Each of the companies that provide their services for traders may tell you some great stories about their amazing success. But think logically: if they were really so cool, they wouldn’t have been the penny stock trading companies. These guys would probably enter some large stocks. So, if they aren’t still there – everything is not so easy for them.

2.Your profits are limited

There are famous success stories, which relate to penny stock trading. According to them, you can turn each $1 into $10 with simply one share.

In theory, it is possible, but the reality is much harder. Even the professional traders expect to get $0.4-0.8 of profit per share. It’s an amazing result and it’s quite real. When you know which numbers you should expect, you can trade safely.

3.Diversify

Playing with penny stocks may be a risky game, though it goes about the low-cost shares. The situation at the market may be changed immediately so that your main task is to diversify your portfolio as much as possible. A perfect diversification means that you buy a few hundred thousands of shares and make enough profits, selling them on a daily basis. As you can imagine, these operations require a lot of control from your side.

 

What is day trading strategies?

Day trading is one of the approaches to trading that concerns buying and selling stocks within one day. Obviously, the aim of day traders is getting tiny profits on spinning the large amounts of shares (and capital). This strategy may be applied to the highly liquid indexes and stocks. In the majority of cases, the beginner traders fail to deal with day trading successfully. The main reason for this is a lack of the strategy, tested in practice.

Usually, the day traders look for a couple of metrics: volatility and liquidity. The first one measures the range in which a trader can operate. The last one allows buying and selling the stock for a good price, getting profits.

There are several common strategies, used by day traders. Here are the short explanations for some of them.

Scalping

The most popular strategy, which is simple enough to be used by anyone. It involves selling the stocks just after they become profitable.

Fading

A much more rewarding strategy that involves shorting stocks right after they moved upward rapidly. The strategy is more complicated than the previously described one.

Daily pivots

According to this strategy, a trader buys stocks when they have the lowest price and sells when the price is the highest.

Momentum

Day traders, who follow this strategy, monitor news and events, occurring during a day. They ‘catch a moment’ when trends affect the stock price and sell it or buy when it’s needed. Momentum traders risk a lot, defining the trends of the day; but they can also benefit a lot from some of their successful predictions.

Make money, opening a deposit account

Each bank allows making money for everyone, who wants to. All you need to do is simply opening a deposit account and putting some amount of money there. Depositing your money means giving it to the bank for some certain period of time (like for several months or for several years). It’s your choice: how long you’d like to lock your money. But you should mind that the longer deposit period is, the higher your interests will be.

Banks need some guarantees that you will provide them with your money for a long period. They will be using your money for their business needs, such as lending them to other people or making some investments. You shouldn’t worry about the actions of the bank. All you need to think of is your deposit term. If you are ready to say ‘bye’ to your money for some period of time, banks will pay some interests to you.

However, this kind of investment is not so profitable, as you may have wanted. A deposit certificate owner can get from 0.15% to ~2% on the annual basis. The certain number depends on the bank and on the term of the deposit you choose.

It’s worth mentioning that this investment tool is perfect for those, who would like to pick a conservative strategy of multiplying their money. The reason for this is the guarantees, provided by the bank and its reputation, proved by the years of successful service.

Make money with lending!

Lending money is the most classic way to earn some interests. It is the simplest way to make investments in our time. All you need to do is finding a person who needs money and offers your services. It is called ‘Peer to Peer’ lending!

The main advantage of making money as a lender is that you don’t have to do anything more, than just lending your money. It is the best example of passive income, which is so popular among many people. ‘Passive’ means that your money grows on their own, without your attention.

The main disadvantage of making money by lending them is risks. Yes, it’s a quite risky business, because you give your money to someone, who uses them in his way. You don’t know, whether this person is honest enough, or he or she is a scammer, who wants to get some money in a dishonest way. That’s the common trouble for people, who lend their money. But there are some solutions for this.

The first thing you should remember about is working with a safe company, which searches for people, who need money. It should be some kind of a ‘middle man’, which connects you and your borrower. While all the work is done by this company, you simply give your money and wait for the interests. They may be equal to 5% rate annually. If you want to earn more, you can choose less creditworthy people as your borrowers; but your risks increase in this case as well.