Posted on 23 September 2012. Tags: trading stock
Trading stock is an important part of building your portfolio. You might hold on to some stocks for decades, but others are bought and sold on a regular basis. Figuring out when to buy and sell can be difficult, though, especially with so much conflicting advice available. While trades should always be done a schedule that makes sense to you, it is also important to make sure that you do not trade out of excitement or out of fear.
If you are going to trade stocks, always make so to do so with some level of deliberation, the stock market often moves more slowly than you think, and trading stock quickly can be dangerous. Unless you are trading something like penny stocks that move quickly, you should have time to sit down and think before you make a trade. Rallies might go on longer than you think, after all, and some falls tend to be temporary. If you are willing to let logic rule your investing instead of fear, you can often take advantage of a market that is dominated by poor decision making. Trading stock should always be a game that is played with a cool head and steady hands.
You should also try to remember that trades usually come with a cost. If you trade too frequently, you might find that various broker fees swallow your profits. Those who can make money on the stock market are those who pull the trading trigger only when necessary, and do so when it will generate the maximum profit or minimum loss. If you can focus on trading stock as a long game, you will always be better off.
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