Two of the Best Strategies for On Line Stock Market Trading
You will not find a lot of fluff in this article. My aim is to provide you, the trader with two of the best strategies for on line stock market trading. These strategies have been tried and true, it is my recommendation that you first paper trade before entering any positions with money. The main purpose in paper trading is to build confidence and as a result shield your trading from the two great enemies of all traders: Fear and Greed. Follow these strategies and you stand a very good chance at being profitable with on line stock market trading.
Upgrades/downgrades
Upgrades
The upgrade and downgrade play is almost always available and is very profitable if traded properly. You can get a free report of the day's upgrades/downgrades by going to Yahoo Finance but I would recommend the cost of accessing it directly through Briefing.com.. The reason is that they have the previous months data archived and it gives you an opportunity to back test your strategy.
If you play the upgrade then it cannot be done nakedly. First, look at what has preceded the upgrade. Is this stock just coming off of earnings release? That is usually a very good sign and most times this move will make you nice returns. In fact, buying the positive release is largely profitable because so often it leads to a positive upgrade the day after and the gap up is substantial.
When buying the upgraded stock it is important to look at which broker gave the upgrade. The "big boys" carry the weight. An upgrade by Lazard Capital does not usually carry the same weight as Bear Stearns. Some of the bigger names to look for are: Wachovia, Bear Stearns, JP Morgan, Robert W. Baird, and Citigroup just to name a few. Again, do that research - it pays off!
Downgrades
There are those who hold to a certain theory that goes something like this: The analysts are working with some of the larger institutions and the downgrade that the financial institution gives provides an opportunity for the large institution to buy low. As a result of their mass purchase the stock of course goes much higher. Do I personally hold to this? No comment. Other than to say: I really don't care! The bottom line is that it provides an excellent opportunity to make money. I don't have time to get into the conspiracy theories, and other minutia. I do have time to capitalize on whatever the market will give me and this is often one of those opportunities. Follow the basic idea laid out in the upgrade section. Do your research and remember that in a bull market a downgrade (like the negative guidance) most often goes back up.
This site goes so far as to offer traders $1,001 if they do not make money. They are one of the very few companies registered with the BBB. They even have a FREE professional Trading Coach Session available now. Check them out at: http://www.stocksoars.com
Bob Ebling is a professional day and swing trader. He has served as the head of a stock investing company in the Mid-West.
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