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Friday, July 24, 2009

Fast Profits With Hot Stocks

By Jason Demand

The is a new game in the stock exchange these days called hot stocks. This goes against the standard Wall St. Recommendation of buy low and sell high. The new hot stocks method is to buy high and sell even higher. The way it works is that you buy stocks that are rising in price and sell them while they are still rising. The time between the buy and the sale is short.

Instead of purchasing undervalued stocks and waiting weeks or months for them to rise in worth, with the hot stocks approach, you buy stocks that are rising in value . Instead of holding the stocks, you wait only a short while and sell them when their value is higher than the price you paid. You turn a fast profit.

Hot stocks are excellent for day traders. If you watch the market trends closely you can choose from stocks that are on the increase. The most important trick isn't to get greedy. Decide before buying the stock the maximum time you intend to hold it before selling. Whether or not the stock is still rising, sell according to your time table. Take your profits and get out.

When a stock stagnates or starts to go down, sell it instantly even if you loss on it. This way you minimize your loss. When you employ a hit and run method, you will take some losses. The idea is to pick more winners than losers. You cover your losses and make a profit.

With hot stocks, you will choose to buy and sell a particular stock in one day. To utilize this method of stocking trading, you've got to stay on top of your investments and watch the stocks closely. Study market trends. When a stock drops, sell it immediately. Don't get greedy or use the old gamblers instinct that tells you you can still come out smiling. You can't on this one stock, but their are lots of others.

Don't put all of your money into hot stocks. This is just a method to make a profit in the stock market. Investors should have a portfolio with solid stocks from different areas of business to guard their investments. Don't neglect your long term investments in favor of hot stocks. Some of your profits from hot stocks should be put into long tern investments.

The idea with hot stocks is to get in and get out. Even if the stock continues to go up after you sell, it isn't money out of your pocket. Remember it may just have easily dropped and cost cash. Buy, watch the price and sell when you have a decent return on your investment. Do not be greedy.

Many backers use a broker to buy and sell stocks. Hot stock investing is not engineered to be used with a broker. If you have to pay a broker's fee for each exchange, hot stocks could cost you more than you are making from them. Online services for buying and selling stocks are better suited to this investment strategy. Look into ways to avoid brokerage fees if you intend to add hot stocks to your investments.

By investing sensibly and using different investment methods you can make money in the stock market. Hot stocks are part of an overall investment plan. Your investments should be spread across different finance instruments to guard your principal and maximize your return. Hot stocks will help you achieve your financial goals, but shouldn't be your sole finance investment. The exchange can be like the lottery, so bet with your head, not over it. - 23223

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