Although it may seem obvious to most stock market traders are a few simple rules you can follow that will ensure that you have more success when buying stocks:
In the U.S. equity market, there are 3 major indices, each consisting of a basket of shares that they are S and P 500 (also known as S & P500), the DOW 30 and Nadaq 100th These indexes generally contain only large blue chip shares as long as you buy from these 3 groups that you will at least know that you get a well-known solid stock.
For example DOW30 contains large industrial customers and large multinational stocks like Home Depot (HD) and Johnson and Johnson (JNJ), while Nasdaq 100 contains mainly Technical companies like Apple (AAPL) and Miscrosoft (MSFT).
Always buy a stock that is liquid, it means that it is a lot traded stock, this will allow you to easily buy and sell at the price you want without having a delay. You will also have a lower spread, thats the difference between bid and price of the stock. For a stock to be considered very liquid it should trade at least 500,000 shares per day, preferably more.
It is preferable to avoid stocks that Bellow $ 10, as this usually means the company is in trouble, but with the bear market of 2008, there has been a lot of good stocks bargin prices between $ 5 and $ 10 Do not buy a stock under $ 5 anytime.
Another consideration to make is possibilities, not the stock has potential?, Will this be important if you want to trade options around your inventory, such as a covered call, or you can buy a put option to protect your stock.
Be very cautious of buying a stock just before the earnings were released, stocks often fall significantly if they come out with a bad report. Earnings releases are 4 times a year with one of them is the annual report.
To trade options ensure that you learn to trade by getting some good education. There are many swing trading strategies that work well with stocks in today's volatile markets.
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