Investing and trading in the stock market means buying shares in listed companies, which is acquiring ownership shares in companies. The shares that a partner holds in the company is proportional to the number of shares of that company he owns. When you buy a stock, you become what is called a shareholder. It means no more and no less that you become a partner of the company.
Day Trading vs Holding strategy
Day trading and buy/hold strategy are the two main types of strategy regarding the stock market. When it comes to holding strategy, you as a trader buy stock to keep it for a longer period to avoid the market fluctuations. You will be shielded from the sudden changes in market trends that can be damaging in case of the short term or daily trading. On the other hand, daily trading is based on taking advantage of market fluctuations. This approach requires constant monitoring of the economic news and technical charts to know when to buy and sell the shares of a specific company.
Daily trading brings more risks since you can’t always be sure about what will happen on the market and how it will reflect on a particular stock. If there had been a formula to predict market fluctuations, everybody would be rich so far.
If you want to be a successful and professional daily trader, you must acquire the mindset that includes a decent amount of knowledge, willingness to take risks, and self-discipline and of course, a little bit of luck.
Is trading stocks still a good idea?
Potential gains with trading stocks require a significant investment of your time, regardless of whether you are trading regular stocks or ETF’s, such as a Cannabis ETF. When it comes to profits, trading stocks can bring you between 0.5 to 4 per cent of the capital on daily trade. It doesn’t sound like much money. Still, it all depends on the amount of money in the game. The profit could amount to 10 to 60 % every month.
The fluctuation of today’s stock market shouldn’t be your enemy. You should instead see it as an opportunity and to make out most of it there are the strategies to know and to implement appropriately.
Using compounding strategy is the best way to make profits from trading stocks. It’s a trading technique that comprises making gains on prior profits. For example, if you trade $20 000 and earn 10% profit per month, the next trade you are starting with $22 000 on your trading account. In case you make 10% during the next trade you will have $24000 and so on. You continue investing your daily profits until your account balloon quickly. It’s not easy but in combination with other good trading strategies is achievable.
Therefore, having an established and comprehensive strategy based on technical and fundamental analysis can be very lucrative. The most successful traders never fail to give the maximum attention to it, even after several years of careers.
How Much Money You can make with trading stocks
In theory, you can expect to make twenty percent monthly with trading on the stock market. It’s above the usual standards, but with a 50% win rate and trading strategy that makes 5 to 15 % or more per month, this is a possible scenario. Still, stay firm on the ground since these numbers show what is realistic for the seasoned traders. Also, keep in mind that your success rate on the stock market also depends on your emotional attitude, especially when it comes to daily short term trading. So stay cold headed and never invest more than you can afford to lose.
Leave a Reply