Stock Tips & Help

Every active traders makes incorrect judgment calls and loses money, but the way to be profitable is to make money more often than you lose it, and not get emotionally involved in your decisions, which is even more difficult than it sounds. Even so, there are a few stock tips to help online traders beat the odds consistently.

First, try not to trade in the “typical” day trading arenas. Tracing major Fortune 500 companies is pretty easy, but equity trades are just one of many suitable options.  Certain options, currencies, and futures contracts all offer sufficient volume and volatility to be ripe for technical analysis and day trading.

Margin trading allows traders with only modest capital to trade thousands of stocks, and though there is still the risk of a margin call, closing out of your positions before the market closes for the day means you don’t have to pay any interest rate on being able to trade on margin, because balances are only calculated overnight.

It is critical to learn the background and current events of whatever you are trading in thoroughly. You want to understand why people are willing to pay the price they are, and have access throughout market hours to relevant news sources for your equity, options, or futures so that you can take advantage of news releases as they change market prices.

Macroeconomic forces also affect market prices more generally. Major news releases from influential corporations can change stock prices, and economic releases from industrialized nations, such as unemployment statistics, can also affect investors’ confidence in the economy, and thus the price they are willing to pay.

Some brokers offer special fee discounts for day traders or at least for day traders who trade above a certain volume, and some brokerage houses even allow active traders to trade on margin at 25% for intraday trades, which amplifies your potential for great gains (and great losses) tremendously.

You also want to analyze the fees that your brokerage house will charge, both per trade and per period, any taxes you will owe on gains, how big a spread exists between bid ask quotes, and how fast trades are executed once you click your mouse. Every little fee adds up, and increases the amount you need to make, on average, per trade, in order to be profitable over the long-term. Doing a little math and accounting work like this isn’t fun, but it will allow you to beat the odds and the 90% failure rate that day traders experience.