Friday, 4 September 2015

STRATEGIES - TRADING

As the name suggests you are actively trading shares if you choose to adopt this method. Which ever site you use should have news or information on whats going on in the world of finance and reasonable graphing software.


Markets usually crash or have a "correction" at least once (usually twice) a year. If you're a little more tuned into the market you'll be able to follow the news and have a fair idea if the market is down or up.

Your timing in this area is crucial. If you buy at a market low you have a much better chance of making a good profit on the upswing. best way to do this in my opinion is to keep saving your money and wait till a drop in the market occurs, at least 5% of the peak maybe even wait till a 10% drop and jump in. Again I would say choose solid stocks with a good return, as they are less likely to collapse in a market downswing. Many times if you time the buy in right you can make 10% on them in a matter of a few months.


Here's a favorate example of mine, It's an Australian share, Commonwealth Bank of Australia (CBA) graphed out using my platform of choice over the course of the last year or so (mid 2014-mid 2015) Looking closely you look at it you can find a few great opportunities both at the bottom of the graph where the shares took a hit (due to share market corrections and dividend distribution) if you were to buy in at the lows there was a 20% climb to where it peaked. Nobody expects you to get in right at the bottom and sell right at the top but even a 7-10% gain in the matter of months (and maybe a dividend cheque on top of that) is not at all unreasonable to expect. Many share traders will be able to buy and sell the same shares multiple times in a year and and make 20% per share using the market highs and lows.

Again same rules as "BUY AND HOLD" apply. try and spread your investments over a few shares, ideally at least 10 so that hopefully you'll be buying and selling and constantly generating money every cycle and if one share doesn't do what you expect it to at least most of the others should.

Most shares will follow the market and rise and fall according unless some major news within that company alters the share price.

Whether you hold out for a 1 percent rise and keep buying and selling more regularly or just move them around when the market moves in opposite ends of the cycle you should make money faster using this method rather than just buying and holding.

There is no right and wrong with this when you choose to get in and out .... if you make a small 1% profit it is still more than you had before and if you make 5-10 percent thats also good too..... 1% rises are easy to get and may occur a lot more often than 10 percent rises. you might make 10 1% trades or one 10% trade. either way you are making money you didn't have before.

This idea will work with most of the bigger shares on the market in either Australia, USA or UK indexes

There are more ideas i'll cover later but this is probably the main concept to get your head around





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