Make Money Trading Online

Although it may seem obvious to most stock market swing traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:

In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These indexes generally only contain major blue chip  stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.

For example the DOW 30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).

Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to easily buy and sell at the price you want without having a delay. You will also get a smaller spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered very liquid it should trade at least 500,000 shares per day, ideally even more.

It is best to aviod stocks that are bellow $10 as this usually means the company is in trouble, although with the bear market of 2008/9 there have been a lot of good stocks at bargin prices between $5 and $10. Avoid buying a stock below $5 at anytime.

Another consideration is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option in order to protect your stock.

Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings are released 4 times a year with one of them being the annual report.

If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.

 A675645879

Other Posts Of Interest
1. Insider Stock Tips: Goodbye Iraq—good Buy Iran
   Originally aired August 26, 2005 Ivy League-Legacy and Monet Oliver DePlace co-anchor this very special show, with a surprise call from the...
    
   

Tweet This Post

Related posts:

1. Is Trading Options Right For You? There is a lot of hype surrounding options trading, and...
2. Should You Become An Options Trader? There is a lot of hype surrounding trading options, and...
3. Protect Your Stocks Using Put Options Hoping and praying that the stocks that you just bought...
4. How to Buy Investment Bonds Bonds are one of the main stream types of investment...
5. Are you a Scapler, Day Trader, Swing or Position Trader? Did you know that there are 4 mains types of...

Related posts brought to you by Yet Another Related Posts Plugin.