Many investors want to find the best short term investment. Unfortunately it is easier said than done. Short term investing can be very lucrative, but also risky. It can last for as little as a few minutes to as long as several months. To succeed in this strategy investors must understand the risks and rewards of each investment. They must know how to spot good short-term opportunities and also be able to pr0tect themselves from unforeseen events. In this article I will give you 3 basic steps to find short term opportunities through stock trading.
There are several basic concepts that must be understood to become a successful short term trader. We will concentrate on one which is recognizing potential candidates. Recognizing the right possible trade means you know the difference between a good situation and one to avoid. Many times investors think if they watch the evening news and read the financial times they will be on top of what is happening in the market. Truthfully speaking, by the time we hear about it, the markets are already reacting. So, here are some basic tips to find the right trades at the right time.
Step 1: Watch the moving averages - a moving average is the average price a stock over a specific period of time. The overall idea is to show whether a stock is trending upward or downward
Step 2: Understand overall cycles or patterns - the market trades in cycles, which make it important to watch the calendar at a particular time.
Step 3: Get a sense of market trends - If the trend is negative, you may consider shorting (selling) and doing very little buying. If the trend is positive you want to go long (buy) and do very little selling.
Following these basic steps will give you an understanding on how and when to spot some opportunities for short term investing.
There are several basic concepts that must be understood to become a successful short term trader. We will concentrate on one which is recognizing potential candidates. Recognizing the right possible trade means you know the difference between a good situation and one to avoid. Many times investors think if they watch the evening news and read the financial times they will be on top of what is happening in the market. Truthfully speaking, by the time we hear about it, the markets are already reacting. So, here are some basic tips to find the right trades at the right time.
Step 1: Watch the moving averages - a moving average is the average price a stock over a specific period of time. The overall idea is to show whether a stock is trending upward or downward
Step 2: Understand overall cycles or patterns - the market trades in cycles, which make it important to watch the calendar at a particular time.
Step 3: Get a sense of market trends - If the trend is negative, you may consider shorting (selling) and doing very little buying. If the trend is positive you want to go long (buy) and do very little selling.
Following these basic steps will give you an understanding on how and when to spot some opportunities for short term investing.
