The 5 Most Important Strategies for Trading Stocks

5 Most Important Trading Strategies

Jan 27, 2020

If you've been following along at In Penny Stock you might have heard me mention some of these tips before. 

They are worth repeating as these are invaluable for your success at trading. 

Here are my top 5 tips for improving your trading strategies:


1. Don't Believe the Hype

Companies that put their shares up and fall under the penny stock category are known to engage in pump and dump schemes.

They'll find as many sources as they can to blast out the news that "This is the new best stock" trying to get as many people investing as possible. 

Once they've reached a peak in their share price, they will sell the shares and get out.

They can make a lot of profit, while those who hold on to the stock after it's dumped can end up with nothing. 


2. Keep in Mind the Amount of Profit to be Made

Don't get greedy. 

You might have heard about investors who have doubled their investments in a very short time, but remember:

The average investor is happy with an annual return of 5-10% on their investments. 

Be reasonable with your return expectations and don't make any risky or unpredictable investments just to try and get more money. 

Often your hastiness will cost you money. 


3. Know the Risk and Cut Your Losses

Say you buy a stock at $1 with the expectation that it will go up to $2.

You're waiting, watching the stock, but instead of going up, it drops down to $0.90.

Instead of hoping that the price will go back up, it's best to go ahead and sell

Cut your losses and get out. 

4. Keep a Trading Journal

If you've got a list of stocks on your radar that you're thinking about trading, go ahead and start recording your predictions of what the stocks will do. 

It's almost like being a scientist. 

You've done the research, read the news, looked at the hype, now, ask your self:

"Where do I think this stock is going to go?"

  • Check back on your predictions and see if they were right or wrong. 

  • If they were wrong, why were they wrong? 

Do the research and learn from the information you might have missed judged or overlooked. 

Next time you'll be able to make smarter predictions. 

5. Invest in Yourself

Trading can be lonely. 

Trading can require you to stare at a screen from 9:30 am to 4:00 pm EST.

  • Make sure you get up, get some exercise, or get outside. 

If you take care of yourself, keep active and keep healthy, you'll be able to make quicker and sharper decisions when it comes to trading stocks. 


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