Trading Tips

Trading tips such as those detailed below are intended to improve your trading success by putting as many positive market factors in your favor as possible. Let's face it, it's a jungle out there in the stock trading world, and you need to come prepared with your own highly-disciplined approach to trading stocks:

Trading Tip #1:

Trade high quality stocks with track records for sequential earnings increases, from quarter to quarter and year to year, like those regularly featured in Stock Confidential.

Trading Tip #2:

Trade stocks that have strong institutional followings. Institutional investors such as mutual funds, banks, insurance companies, etc. drive the market—not you and I.

Trading Tip #3:

Trade a manageable number of stocks— maybe only 4 or 5 stocks at a time.

Trading Tip #4:

Unless you are a seasoned trader, select stocks which average at least 250,000 shares a day. Thinly traded stocks are much more volatile than more widely traded issues and can wreak emotional havoc on less experienced traders.

Trading Tip #5:

Trade only during strong, confirmed market uptrends. Three quarters of all stocks tend to follow the fortunes of the overall market. The trend really is your friend!

Trading Tip #6:

Trade during those periods when leading stocks are breaking out with regularity. Like so many "canaries in a coal mine," leading stocks tend to continually make new highs in strong markets, and are the first to struggle in weak markets. By the same token, high-quality, leading stocks are also among the first signals of a return to better market conditions when they form reversal patterns, then start to move back up again. Stock Confidential can help you spot these profitable buying opportunities.

Trading Tip #7:

Trade stocks in sectors that are currently in favor. Sectors rotate in and out of favor, and the stocks within these sectors tend to move in tandem. Why try to second-guess when an out-of-favor sector will begin to attract renewed interest?

Trading Tip #8:

Trade only stocks which have formed explosive chart patterns when they break through their buy points on strong, well above average volume. Stock Confidential's goal is to identify these buy points by finding what we believe to be the path of least resistance to potentially explosive upside moves.

Trading Tip #9:

Pay close attention to news releases throughout the market day, and even after the trading day. These news releases, which include earnings reports, news bulletins, analyst upgrades or downgrades, insider trades etc. often have a powerful bearing on how your individual stocks will perform.

Trading Tip #10:

Ignore opinion and "tips." There are a lot of self-appointed gurus on TV and elsewhere in the media, and they are often WRONG! Trust only in the facts and a stock's price action as indicated by its chart.

Trading Tip #11:

News rules! Pay close attention to scheduled economic reports. They are bellwethers as to the strength or weakness of the economy and the releases of these reports often have a dramatic affect on the market and ultimately, the stocks you trade.

Trading Tip #12:

Decide in advance whether you're buying a stock for a long-term investment or a short-term trade and stick with that time frame. Don't execute a trade with the intention of pocketing a short-term windfall, and then suddenly decide to switch to a long-term buy & hold, or vice versa.

Trading Tip #13:

Have an exit strategy in place before placing your trade, and stick to it.

Trading Tip #14:

Use a real-time trading platform/charting service. This will enable you to gauge the strength of a stock or index's movements.

Trading Tip # 15:

Cut your losses and sell a stock if it drops 7 to 10% below your buy price.

Whether you're a seasoned trader, or just starting out, it's our hope that you will benefit from some of these trading tips.