Building a Stock Trading Strategy

Tips to Learning Stock Trading
There are many considerations a nascent stock trader should take into account before trading their first stock and a trading spreadsheet would be a very good way to keep track of them all. The first would be to sort out all the definitions involved in trading stocks. These would include what trading long or short means, how many shares make a lot, what are the consequences of being wrong when trading long or short, what is an equity, how to read a company balance sheet etc. All these must be learned and completely understood before anyone even begins trading stocks. The consequences of being wrong when trading equities can be very dangerous and very deadly to a trader’s bank account. Therefore, the old adage knowledge is power would never be more true than in the stock market.


Building a Stock Trading Strategy
As it is with any other job, having a strategy or plan to do it is a very good idea. The reason isn’t just to know what to do from the start, but far more importantly, what to do when something goes wrong or something unexpected happens. Some common stock strategies are leveraging your long buys by holding a short position on the same stock at the same time. This means you win if the stock rises and protect yourself if you guess wrong. That is always a wise move. You can do the same when you short a stock which means guessing that its value is going to decrease. It is always good to hedge that bet by holding a long position in the same stock in case its value rises unexpectedly. All of the above can also be captured most consistently with a trading spreadsheet as the daily values of the hedge become clearer when organized this way.

The Tools to Stock Trading
There are a host of tools to trading stocks. Some are part of the market while others are sold by outside companies. The tools that are part of the market are online access to the trading floor giving you an easy way to trade stocks from anywhere. Another tool would be all the financial analysis available to any stock trader today. Company balance sheets and profit & loss reports provide a wealth of information on the value of the company, and whether it is worth trading. Online news sources provide access to publicly declared news releases. Stock positions of the company’s board of directors are also legally required to be posted publicly and provide a snapshot of what the leadership of the company is thinking. These all inform the stock trader whether they should trade the stock or not.

Making Money with Online Trading
Making money trading stocks online is not easy unless you have traded stocks for a long time, and you understand the market well. However, if you do, you can do very well trading stocks online. If you can identify points of momentum within a stock’s general movement during the day or if you read of some new public activity of the equity, such as a new product soon to be on sale that is a good time to buy the stock. If the news is the opposite, selling the stock would likely be the wisest move. Both decisions make money online for the trader. A trading spreadsheet would be used optimally in this situation as you would be tracking a stock over a set amount of time. That is the purpose of the spreadsheet. A spreadsheet is uniquely designed to help you find trends.

MyTradeAnalyzer offers each broker a sample analyzer that includes a full array of trade data that is already processed to give you a feel for  the analyzer while it breaks down your trading log.

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