Investing in the stock market is a way to make more than just a little extra cash. In fact, with the right approach and the right skills can earn you decently. If you want to become a stock market millionaire then here are 13 of the most proven tips to reaching your goals, and the earnings you have always wanted.
1. Focus on Hot Stocks Hitting New Highs
As you get started with your stock market dreams, make sure to focus on hot stocks. Do your research, look into their patterns and place your focus on stocks that are already growing as you plan to stick with them until they reach new heights.
2. Focus on Large Cap Stocks Hitting New Highs
Do look to stocks hitting new lows if they are preferably large caps, that is companies with strong fundamentals & capability to return with a bang. These stocks hits low because of macro-economic variables & because of issues with company fundamentals (micro economics).
3. You Can Buy and Short Sell
There are some people who think they need a bull market to get rich. This isn't the case. Don't ignore short selling. You don't have to hold on to a stock for a long time to earn a profit. Just look at the success some day traders have; they are the epitome of earning off of short selling.
4. Go long on shares with good fundamentals
You can hold on to strong fundamental stocks which can fetch you returns in short term too, but can provide you bigger returns if you go long on, say 2-3 years. But as mentioned above don’t stick to large caps alone as our strategy should be continuous returns which is hard with long term holdings where in short selling will assist you fetch returns.
5. Cut Your Losses Quickly
If you want to be successful in the market, take your ego completely out of the situation. If you face a setback, cut your losses and move on fast (sell the particular stock & don’t sit on losses). Do not dwell on your failure, but instead look to the future, where in the same money can be utilized in other performing stocks to fetch u decent returns. You are going to fail, so be prepared and just be ready to move on.
6. Don't Be Afraid/ Hesitant to Take Partial or All Profits
The thing about your earnings is that they aren't really profits until you take them. Don't be afraid to take partial profits or take profits too quickly. The market changes fast; it is OK to get out when you feel it is right and take the profits that you can.
7. Embrace New Technologies
The world is changing and it is changing fast, so you need to be changing with it if you want to be successful in the stock market. Now is not a time to be afraid of technology companies. There are the companies of the future. Embrace new technologies and business models and be willing to stay ahead of the time as you look to your investments.
8. Stick With Liquid Stocks
If you want to earn some serious income, then it is best to stick to liquid, highly traded stocks. Try to stay away from non liquid stocks at all costs. These are stocks that make big promises but tend not to uptrend. But yes if some stocks are on its path from becoming a mid cap or large cap from the small cap, based on your detailed research on the particular stock then do go for that calculated risk, but do stick to the above rules.
9. Don't Believe Anything the Stock Says
In the trading world, talk is cheap. Don't listen to promises or hype, look only on the action of the stock. Do your research look into how that stock is performing and what action it is really taking. This is how you will know what to expect from the stock in the future.
10. Don't Diversify and Don't Use Leverage
Many people/ brokerages talk about diversifying and using leverage. This is not the way to earn millions. I typically keep 7 to 10 stocks at a time and don't use more than 30% of my assets in my investments. Once you book profits in your stocks replace them with new ones from the money you get out of selling the other stock including its profit helping you put more of money into stocks thus helping you grow more.
11. You Don't Need to Buy Bottom, Sell Top
So many new traders are focused on the old adage that you need to buy right at the bottom and sell right at the top. Yes it would be nice if you could as that would mean the most profits possible, but you just need to focus on the meet of the move, not necessarily the top and bottom. You can get in during the middle and still make some major profits.
12. Never borrow or invest in stocks cut shorting your daily financial needs
While investing in stocks do remember not to forget you are a social being & need to fulfill your family financial needs on daily basis & not to put everything you have in stock market. Also should control your emotions, excitement, greed & fear while trading. Also only invest the money you will be able to allocate in stocks & never borrow. There is always a second chance to buy the stock on a later date, so don’t be in a rush ruining your financial balance.
13. Always Make a Plan
If you want to truly find long-term success in the stock market, the best thing you can do is to go into every trade with a very specific plan. Before you get started create a specific risk/reward profile for what you demand of your investments and stick with it no matter what. Never stray from the plan.
Earning millions in the stock market can seem like a daunting task, but it is one that you can achieve, if you follow these steps and keep this dedicated approach in mind. If you prepare yourself for setbacks and understand the challenges that can come with this investing strategy, then you may just find yourself coming closer and closer to reaching your investing goals.
No comments:
Post a Comment