Stock Trading Strategies

As compared to passive trading, the probability of success in stock investment is

significantly higher with the application of stock trading strategies. There are tremendous stock trading strategies recommended by experts; choosing between these trading strategies can be a difficult decision to make without adequate knowledge on each of them. Combining some of these trading strategies with other advanced research tools, for instant technical analysis, helps in making the probability of success even higher. This articles gives you are brief introduction to three common types of trading strategies, namely Penny Stock Trading, Shorting Stock and News Trading.

Penny Stock Trading

Many people define Penny Stock Trading in different ways. For example, according to the US Securities and Exchange Commission, "Penny Stock" refers to under-priced (below US$5) securities of very small companies. While there are people who define "Penny Stock" as securities that are priced below US$1, on the other extreme, some define is as securities that are priced below US$10. Overall, "Penny Stock" deals with low-priced securities of companies associate with small market capitalization. Those companies are often listed "over-the-counter".

Shorting Stock

Shorting stock is also known as short selling stock. It is a process in which you sell the stock first before you own it. Investors borrow a share of stock from a broker and sell it. At the end of the day, the investors must purchase a share of the same stock to replace the borrowed share. From a decline in a security's price, investor can earn profits.

News Trading

News Trading is a type of common stock trading strategy. It is also a highly recommended strategy for beginner stock traders, the reason being that it enables investor to earn big profits in a short amount of time. However, whether the success of investment can be achieved relies heavily on being in the right place at the right time.

by: Kamal Kannan

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