by How do you make sure that you are staying up to date on the market well enough that you can trade smartly and not make a big mistake in stock trading? It’s tough to do, and most experienced traders spend months just practicing their trades before they even get into actual trading. If you are wanting to make intelligent trades with stock that will pay off in the future, here are some tips to help you out.
Use Stock Tracking Tools
It can be a lot of work to keep track of multiple stocks across multiple stock indices. So, it will help you to use tracking tools that alert you when there are changes. That does some of the work for you so you don’t have to keep your eyes glued to the screen all the time.
If you are trying to trade stock intelligently and do it all on your own, and you’re trying to track multiple stocks, you’ll be overwhelmed very quickly. That’s especially true if you’re trying to work a job on the side and stock trading is not your only business. So, you need some tools to help you out, and we recommend looking for stock trading tools that have good reviews and a lot of features.
Read Earnings Reports
Any company that is publicly traded and has their stock listed on one of the US Stock Exchange indices will issue quarterly earnings reports. These are released four times a year, and there is a lot of anticipation around their release dates, because traders know that stock prices will move before and after the earnings reports are released.
In anticipation of the earnings report, traders will often buy up more of the stock or sell some of it off, depending on what they expect the stock to do. You can read about earnings reports estimates to get an idea of what’s expected. Major financial firms will release these estimates periodically so that people can anticipate what’s coming they’re not always spot on, but they tend to be close to the actual numbers that are finally released.
When the report comes out, be prepared to move very quickly with your trading, as the stock price may change drastically and speedily. This is not the only time that stock prices will change, but it tends to be one of the most significant factors in contributing towards stock price movement.
Know Your Change Factors
What does make stock prices change? There are a number of factors involved, and you ought to be aware of what they are and be tracking as many of them as possible. Here are some of the most important ones:
· Inflation- If inflation is high, stock prices tend to be low, and the reverse is true as well.
· Company Revenue- Of course, if the company to which the stock belongs is earning a lot of money, their stock tends to go up. However, don’t focus on this as the only affecting factor.
· Profit Margins- Even if the company is making a lot of money, if their profit isn’t high, their stock price is going to be hurt.
· Company Growth- Once again, revenue can be high, but if the company isn’t even growing and improving from quarter to quarter, the stock price tends to drop.
· Annual Forecast- When companies issue early reports, they usually provide an annual forecast as well, or at least quarterly forecast. If earnings are high but the forecast is poor, the stock price tends to drop.
· Economic Factors- There are many economic factors at work that affect the price of stock other than inflation. Look for reports about Nonfarm Payrolls, Unemployment Claims, interest rates, and more that are considered influential in determining how the economy is doing.
Give Yourself Time to Watch the Market
If you’re not spending much time looking at the market, you will not be able to notice trends and catch investment opportunities as they happen. Instead, you will be playing catch up and not making the kind of profit you could be. In order for most people to be successful on the stock market what they need is more time to watch and analyze it.
How do you give yourself more time? You need to examine the parts of your life that you don’t need to take care of on your own and that you can find someone else to do. For many people, that would include tasks like housework, babysitting, and taking care of the yard. For instance, you could have cleaning blinds done by Imagine and their professional cleaning service, and you could have family members watch your kids periodically. This gives you time to focus specifically on stock market trades.
The more time you can spend analyzing the market and watching the trades closely, the more likely you are to make good deals at the right times. This is an essential part of catching those opportunities and profitable market traders take advantage of.
Only Take Risks When You Can Afford Them
Many people’s investments crash and burn in the stock market because they put all their money into risky investments. If you cannot afford to take a risk, then don’t take it. On the other hand, just because you have money to burn doesn’t mean you should put it into a risky investment.
You have to be willing to take some risks when playing the stock market, but you also can’t afford to be foolish in your trades. If you only invest a little money here and there, your return is likely to be small. Be prepared to risk a little bit when the investment looks worthwhile.
If you’re playing the long game and you intend to be in the stock market for a while, then look for surefire investments. Focus on stocks that have done well historically and that have the potential to shoot up very quickly in the near future. In that way, you can avoid a lot of the risky investments that cause other people to lose their fortunes.
