New Forex Trading Strategy

Tuesday, July 28, 2009

Play The Market with Hot Stocks

By Hannah Page

The is a new game in the stockmarket these days called hot stocks. This goes against the traditional Wall St. Advice of buy low and sell high. The new hot stocks strategy is to buy high and sell even higher. The way it works is that you buy stocks that are rising in value and sell them while they're still rising. The time between the buy and the sale is short.

The advantage of buying stocks this way is the short turn around time. Your money isn't tied up waiting for an undervalued stock to rise. The old system is still good, but adding hot stocks trading to your investment planning will help grow your money quicker.

This investment plan is especially suited to day traders. You've got to be aware of the market trends and select stocks that are showing a noticeable consistent increase. Buy the stock and after it rises enough to offer you a profit, sell it. Don't be tempted to keep hold of it beyond making a decent profit. This is a tactic, not a get rich quick scheme.

If you happen to pick a stock that starts to stagnate or drop in value, sell it straight away, even if you've got to take losses. Never think the stock will recover and you'll get your investment back. If it drops lower you can lose even more. The idea is to maximize your gains and keep your losses as low as possible.

Hot stocks are brief investments and shouldn't be held onto for over a day or 2. Stay on top of the market trends and your stock prices so you can sell at the most advantageous time. This method of investment has hazards and often you'll lose. That is's alright. The most important thing is to chose more winners than losers.

You wouldn't go to Vegas and put all your money on the roulette wheel, and you shouldn't put all your investment capital into hot stocks. This is one of many monetary strategies you need to use to enhance your cash. A solid diversified portfolio will look after your capital, although the returns may be much lower. Long-term investments should be the cake of your investments. Hot stocks are the topping.

The idea with hot stocks is to get in and get out. Even if the stock continues to go up after you sell, it is not money out of your pocket. Remember it could just have simply dropped and cost money. Buy, watch the price and sell when you have a decent return on your investment. Don't be greedy.

Many investors employ a broker to buy and sell stocks. Hot stock investing is not built to be used with a broker. If you have got to pay a broker's fee for every transaction, hot stocks could cost more than you are making from them. Online services for purchasing and selling stocks are better suited to this investment system. Look into paths to elude brokerage charges if you plan to add hot stocks to your investments.

By investing wisely and using different investment methods you can make money in the stock exchange. Hot stocks are part of an overall investment plan. Your investments should be spread across different financial instruments to protect your principal and maximize your return. Hot stocks will help you achieve your financial goals, but shouldn't be your sole finance investment. The stock market can be like the lottery, so bet with your head, not over it. - 23305

About the Author:

0 Comments:

Post a Comment

Subscribe to Post Comments [Atom]



<< Home