When you begin investing, it is important that you know different stock trading strategies. This is to make sure that you can choose profitable stocks to invest in, lower your risks, and garner large profits. To get started, here are 5 stock trading strategies that can help you succeed in the stock market trade.
Stock Trade Strategy #1 – Income investing
Income investing is one of the low-risk stock trading strategies. That is because this strategy employs a stable stream of income-generating stocks. Each of these stocks is seized by collecting assets. They generate income annually with relatively low risks. This is a perfect strategy to use if you are new to trading or the market is unstable.
Stock Trade Strategy #2 – Short Selling
There is a way to profit on stocks even if their values keep going down and that is through short selling. Short selling is done when the investor bet against a certain stock. This means that if the stock value goes down, the short seller profits. However, this is one of the high-risk stock trading strategies. Thus, you should tread carefully when doing short selling.
Stock Trade Strategy #3 – Growth investing
One of the common stock trading strategies is growth investing. It is focused on increasing the capital of the trader. The company which has growth investment stocks will continue to generate profit and reinvest the profits as their capital. This is enticing to many investors especially if the company is still small but has a huge potential to grow and earn greater income.
Stock Trade Strategy #4 – Trend investing
If you are looking for more safe and profitable stock trading strategies, you can try using the trend investing strategies. This is done by watching the price movement of the stocks. If there is a singular overall direction of the price movement, then that is the trend. If the overall direction is booming, investors purchase stocks. If there is a downward trend, then they sell the stocks.
Stock Trade Strategy #5 – Gap strategy investing
Gap strategy investing follows a principle where the investor finds a gap in the price of the stocks. Then, they observe the first hour of trading to determine the trading range. If the price increases above the range, this is a signal to buy. On the other hand, if it decreases, this is a good time to make a short sale.
Stock trading strategies take time to master. Thus, it is advisable to start small when you are just a beginner in investing. Once you get the hang of it, you can increase your investments and try other stock trading strategies. Do you want to know more about stock trading strategies? Follow our latest stock trading blogs!