subject: Successful Stock Market Trading Strategies [print this page] Stock market trading can provide you a great opportunity to earn profits. However, due to the uncertainty in the stock markets, it is always advisable to know stock market trading strategies before investing in this arena. Although stock market trading strategies do not always guarantee success, they can help you to maximize your chances of making profits while minimizing losses.
Stock Market Trading Strategies for Success
Here are some successful stock market trading strategies.
Value Investing: This is a long term strategy where investors buy a stock they believe is undervalued often because of short term trends or other factors unrelated to the actual worth of the company. Familiarity with financial documents and general accounting can prove to be invaluable, as it enables the investor to understand financial disclosure forms and balance sheets of companies.
Swing Trading: This is a relatively short term strategy, where investors try to identify and capitalize on weekly or daily pricing trends. For instance, if traders act in a bullish manner towards financial companies' stocks, a swing trader might buy these stocks while it is rising and pitch them just before the price goes down. Conversely, if investors are acting in a bearish manner and the swing trader feels that prices are too low, he may buy the stock and hold it while till prices rise.
Seasonal Tendencies: In this strategy, investors try to identify the movement of stocks in certain sectors because of seasonal variations, which are not related to the actual worth of the stock. A hypothetical seasonal variation is when defense stocks rise during the Olympics, when there is a surge of nationalism among investors.
Investments in Blue-Chip: This is one of the most popular and conservative practices in long term trading, where investors invest in blue chip stocks that offer dividends, holding them for longer periods. Investors using this strategy will generally purchase stocks of a number of different industries to guard against a decline in prices of a single sector or company.
Emerging Markets: Sometimes traders try to start early in an emerging market, waiting for other investors to follow suit. Emerging markets can be a particular sector or a geographical region.
