From all the hundreds of stock trading tips that I’ve been offered over the year, there is 3 of them that made the biggest difference in my trading life. Although most of the tips revolved around being persistent, being diligent and being emotionally neutral none of those made any real black and white difference in my trading decisions.
So, here are my 3 top stock trading tips. They are very practical and very useful – something you can use in every single trade you enter or exit to help you make better decisions. It’s also worth reading up and learning more about each one of them.
1. Good Volume
Volume is a great indication of the amount of money flowing in and out of a stock. We always want to follow the money and volume helps us gauge that. Think of it as the volume dial on your radio. The higher you turn it the louder it gets. The “louder” a stock gets the, the more potential there is for profit.
2. Weakness and Strength
Chasing bad stocks and “hoping” they will come good is a disease that most struggling traders suffer from. The golden rule is simple: buy on weakness and sell on strength. When you look at any stock, try and determine first and foremost whether it is undervalued or overvalued. If it is undervalued, you can buy because you are buying on weakness. If it’s overvalued, you can sell because it is overvalued.
3. Moving Averages
These strange lines on a graph is more than just confusing indicators. The simple moving average is a great indication of a stocks future movement. Although it is based on that stock’s past movement, it is still one of the best ways to gauge future movement of any particular stock. Moving average crossovers are great buy and sell signals and is very reliable. In fact, it is so reliable that many day traders only look at moving average crossovers.
I think you’ll agree that these 3 stock trading tips are very practical. Although I only discussed them briefly, you should take some time to read up on each one. Each one can make a huge difference in the way you analyze and asses a stock and your entire trading venture.