Short Term Stock Trading – Tips for Turning a Profit!

  • Post author:

Luis Aureliano

Short term trading has become an incredibly hot topic among investors as of late, and for good reason. The reality is that short term trading can be an incredibly profitable endeavor. However, as with any other form of investing, it can also be a bit risky. With that said, today, we’ll go over the pros and cons associated with this short term trading and provide a few tips that will help you become a more successful trader.

Pros & Cons

As with anything else in life, trading comes with its own set of pros and cons. Here are some of the most important pros and cons to take into account when making your decision if short-term trading is for you

Pros

  • High Returns – Short term trading vehicles tend to come with incredibly high returns. Even day trading vehicles with normal returns will generally yield higher returns than traditional investing methods because returns are realized on a daily basis.
  • Exciting Trading Environment – In most investment vehicles, the slow pace can make things rather boring. However, because of the fast pace associated with Short term trading, the process is relatively exciting.
  • Compounding Gains – With traditional investment vehicles, gains are realized over a long period of time. However, because Short term leads to daily gains, the amount of money you can make over time as these gains compound is incredibly large.

Cons

  • High Risk – When Short term trading, you’re essentially making short term predictions with regard to what’s likely to happen in the market. Because long term predictions have a higher probability of being correct, short term trading can be relatively risky.
  • Time Investment – Traders need to find new trades each and every day or so. This requires quite a bit of time.

Tips To Help You Become Successful

As mentioned above, Short term trading can be incredibly profitable. However, to make it profitable, it’s important that you trade the right way. Here are a few tips to help you become a successful…..

  • Pay Attention To The News – If you’ve invested in any way, chances are that you know the importance of the trading with the news. The bottom line is that the news moves the market. Any time there is positive news released about a publicly traded company or any other asset for that matter, the asset’s value is likely to climb. Adversely, negative news will lead to negative moves. So, by watching the news, chances are that you will be able to pick up on trends that will lead to profits!
  • Learn About Technical Analysis – In the world of investing, there are several different types of analysis. However, they all fall into one of two buckets, either technical or fundamental analysis. Technical analysis is the type of analysis that shows what to expect in the short term. Because we are interested in the short term process, it’s a great idea to do your research and learn everything you can about technical analysis and how it can help you become a more successful trader.
  • Create A Strong Trading Plan – No matter what you want to do in life, chances are that you will be more successful with a plan. So, before you get started, it’s a good idea to create a trading plan. Your plan should include strategies for expanding profits, loss exposure strategies, stop loss and stop gain limits, and anything else you can come up with that will help to guide your trading process.

Final Thoughts

As mentioned above, short term trading can be an incredibly profitable process. By doing your research and taking advantage of the tips above, you’ll likely find that the concept of day trading is a great way to make your money grow!

 

Continue Reading Short Term Stock Trading – Tips for Turning a Profit!

An introduction to the workings of the Stock Market

  • Post author:

Author: Conor Doherty

If you have a pension or investment ISA, it is likely that you have shares in a company.

Shares are portions of a company owned by investors when a business lists or goes public on the stock market.

The price of a share is set by the value of the company and the amount of stock available, this goes up and down depending on confidence and performance of the business.

Once you have a share in a company, you then become a shareholder, which in some cases means you can have a say on its decisions depending how much stock you own.

More adventurous investors can trade in price movements through spread betting or contracts for difference.

.

Why invest in shares?

The main reason for buying shares is to make money from the company growing or from the dividends or payments that investors receive from annual profits.

Another benefit of dividends is that investors can reinvest them and boost their returns without having to commit any new money.

If a share price rises, your investment value will increase, but it will also fall if the price drops.

A share is different to a savings account or bond as there is no guarantee of the return you will get and you could lose money if a company does badly or collapses.

.

How much does share dealing cost?

The amount you pay for a share is determined by its price, the risk, and the broker or platform you are using.

Platforms can charge as little as £2.50 per trade but some will have annual account fees.

There is also Stamp Duty of 0.5 per cent to pay on share purchases.

Shares prices can sometimes fall below 1p, which sounds cheap but can be a warning sign that a company is doing badly.

.

What makes prices change?

Share prices are dictated by confidence and profits. If investors think a company is doing well or is set to improve, you will happily put money in, pushing the price up.

But it will go down if confidence is low.

Company shares can also be dragged up or down by the rest of the stock market or the sector they work in

The key is to time your investment right so you don’t put money in at the wrong time and try to spot decent shares before others while the price is low.

Cheap shares can be a buying opportunity, but you need to be sure the price won’t fall further.

This is why it is important to research companies before investing.

.

How do you value a company?

It is hard to predict the future, but there are pieces of company information that will indicate its financial health.

Its most recent profits will show how well a company is doing. Also, check the balance sheet for its assets and liabilities as this shows how much money is coming in and out and how much debt there is.

Another method is to compare a company’s share price with its competitors and assess how valuable it is.

This can be done using the price-to-earnings ratio, which compares the share price with the amount of profits it makes per share.

For example, a company with a P/E of five is valued lower than one with 20. This may mean it has poor prospects or that it is being overlooked.

.

How to choose a stockbroker?

You can trade shares or Forex through a broker or trading platform. Prices vary depending on how often you want to trade and the type of account you want as well as the assets you want to access.

Some will let you just do it yourself, while others will provide guidance and discretionary portfolios for an extra charge.

You can check the permissions of your broker and platform on the Financial Conduct Authority website.

Shares are not for everyone and you have to be prepared for good and bad times.

You won’t necessarily get rich straight away, but you will get the best out of your portfolio by making well-informed decisions and keeping your dealing costs down.

Continue Reading An introduction to the workings of the Stock Market

Online gambling in South Africa: the next big investment?

  • Post author:

 

2015 was set to be a good year for online merchants in South Africa, as a change in legislation emerged which opened up new opportunities for the stock market.

In January, it was announced that online gambling would become legal in South Africa, presenting land-based casinos with an interesting opportunity. The Remote Gaming Bill was passed at the turn of 2015 by shadow trade minister Geordin Hill-Lewis, and now it is expected that it will be passed by Parliament over the course of the year.

Prior to 2015, gambling in South Africa was only legal in land-based casinos, or, perhaps interestingly, in online sportsbooks. Now, in a few months’ time, those games which are deemed “interactive” games by the 2004 National Gambling Act, including poker, bingo and casino games, will be legal.

It presents a huge opportunity for investors within South Africa, particularly given the popularity of online casinos. It is no secret that players in South Africa would get around the legislative obstacles by gambling – legally – at websites hosted in other countries.

Now, websites based in South Africa are already reaping the benefits of legal operations within the country. This has opened a whole new window of opportunity for a number of communities – players no longer have to worry about sites being shut down, losing their funds or banks refusing to process the funds they may have won.

So how can an investor get involved? Some of the biggest mergers in recent years have happened as a result of online casino sites acquiring others – for example, over the years PokerStars, which has a number of celebrity endorsement, has had many owners.

There is also the technology aspect to consider – online gambling, which has risen to a global revenue of $41.4 billion in 2015 (up from $7.4 billion in 2003), is largely gaining in popularity thanks to the provisions of gadgets that allow us to gamble wherever and whenever we want. It would make sense, then, to perhaps invest in a producer of mobile smartphones or tablets, in conjunction with an online gambling company.

Of course, this presents its own series of legislative obstacles, but with the recent change in law in South Africa, there’s no reason why investing in online gambling should not be a lucrative long-term plan. While technology develops, we’re in for an exciting future in the world of investment.

Continue Reading Online gambling in South Africa: the next big investment?