Saturday, July 31, 2010

What advice can you give for short term stock investing?

I'm not looking to become a millionaire through stocks. Just a place to get my money to earn higher interest. I'm interested in making short-term investments, as in buying and selling in a matter of months. What advice can you give me? What tools to use? Is seasonal stocks any good, etc.? Simulation tools? How exactly does short term investment work? Does it earn you more than a CD bank account?What advice can you give for short term stock investing?
Yes you can do it. Most people that try what you're doing fail (96% stop after the first year)... most of those in the first 3-6 months.





Comparing a CD to short term trading is like comparing apples to a pen.





CD's are insured by the US Gov't up to $250,000 (in USA). Short Term Trading can (and does) lead to losing 50% - 100% of all your trading money.





Success in trading is dependent upon hard work and developing a style that works for you. There is no formula. There are no short cuts.





Read some (2-4) basic books on investing..... then move on to more involved books on trading.





Don't lose site of the importance of good money management and psychology (the market... as well as yours). A good book to start in this areana is: Trading In The Zone, Mark Douglas.





In short, based on how you phrase your question.... I don't think this is a good idea for you...... (at least right now). comparing earning money on a CD to earning money on stocks..... tells me... you have a long way to go.What advice can you give for short term stock investing?
There's only 2 ways to make money in the stock market:


1. Buy low, sell high (eg. Apple Computers)





2. Buy shares in a financially strong company and continue to hold the stock ongoing to make a return on investment through quarterly dividends. (eg Coca Cola)





If you want to do short-term investing you have to choose the first method which is hard work. You need charts, to see what the share price is doing and whether the stock is trending. I would recommend Meta Stock software for this: http://www.equis.com





I think the second long-term method is much easier. You can find good books about dividend investing at http://www.amazon.com
My advice to anyone who seriously wants to make money trading stocks short-term is ';don't do it!';... If your time horizon is ';a couple of months';, then you are NOT investing, you are trading....which is the same as gambling.
Don't do it. It's not the right time. If you want to invest your money, buy government debt, right now it's the safest bet, but the interest isn't that high. Check the bloomberg site for info on investment.

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