In the previous post, The Best Stock Trading Patterns of 2019, I discussed three important strategies that we use at InPennyStock in order to be a successful trader:
Here, we are going to look at the trading tactics that are working.
Day trading is when you buy and sell a stock within the same day.
There's a rule established by the government called the PDT rule, or the Pattern Day Trader rule.
What it does is limit traders from being able to do more than four trades in a five-day period.
Many day traders don't take it seriously, they just buy and trade random stocks that they receive an email or an alert about.
Just like anything else, stock trading is a skill and the more you learn about it, the more you refine it, and the more you practice it, the better you'll be at it.
At InPennyStock, we always encourage people to do virtual trading so they can:
Essentially day trading is when you do a trade in and out of your account on the same day.
This is your first and most important strategy.
Swing trading is a bit more of a long-term practice.
When you're doing swing trading, you're not trying to trade within the same day, it might be a week, a month, or a few months.
This way you can make an effective, smart decision on the stock.
You will understand that the stock price is naturally going to swing and that there will be some volatility in its pricing.
Keeping this in mind, you'll want to buy low and sell high.
With scalp trading, you're looking for small percentages of change in the stock price.
If you start watching the stock market, you will see that every day, there are thousands of stocks that go up and down by only a few percentage points.
With scalp trading, you are making your profit when you notice these small changes and you sell the stock and get out.
Scalp trading now has no commission fees.
Because of this, there's been an increase of people just trying to make a dollar on a trade.
For example, someone might buy Apple at 248 and sell it at 252, and just make those three dollars and a large number of shares.
Shorting is a bit more of an advanced style of trading.
Say you bought a stock at a dollar. Normally you're hoping the price goes up to two dollars so that you make a profit.
With shorting, however, you're actually hoping that the stock is going to go down in value.
You would then hope that the stock price goes down so you can pay back the loan of your share at a lower price.
It's basically the opposite of what you're normally thinking.
You're trying to sell high and buy low, so you can make your profit on the split of that.
Shorting is a slightly more advanced trading style because there's a larger risk involved.