Since you would like to make money when trading what are some profitable tips for trading stocks? Trading tips come in two forms, which stocks to trade and how to trade them. If you go online and Google “trading tips” you get all sorts of advice. For example, Money Morning offers top tips for trading penny stocks today. The article starts with this.
This Stock Could Make 420% Gains as America’s Presidential Battle Rages:
2016 is already forecast to be the most expensive election of our lives as America drowns in political advertising. But this profit play won’t just resist the election-year chaos – it actually feeds off it. I’m projecting 420% gains for this small-cap stock once the shouting’s over – and this report shows you exactly why.
They go on to talk about penny stocks and their best tip is that you sell quickly once you make a profit in penny stocks. Holding on to a penny stock for more than a few days may result in the loss of previously gained profits. So, first there is a pitch for a specific stock and then they suggest that you only trading penny stocks that trade in high volume and that you get out fast if you make a profit. For more thoughts on penny stock trading take a look at our article by that name.
Finding Potentially Profitable Stocks
Stocks that tend to be profitable are typically under-priced and volatile. Profitable tips for trading stocks should take this into account. Thus, here is a tip. Go to the finance pages of Yahoo or Google. You can screen for market cap, P/E ratio, dividend yield and price change in the last year. Pick a market cap that fits large, medium or small cap stocks. Pick a low P/E ratio range and pick a top range for price change. When we picked a $100 million to $500 million market cap range, a P/E ratio of zero to 1.25, dividend yield of zero to 0.53% and a 1 year price range of -24% to -100% we got 21 stocks. This is a manageable number to analyze.
Analyzing Potentially Profitable Stocks
When you picked a list of stocks use technical analysis tools to help forecast short term price movement and fundamental analysis to help forecast longer term success of the stock. Technical analysis of high trading volume stocks will help with short term profits. Knowing the intrinsic stock value of stocks that are in trouble could turn up a stock that will rise by 10,000% over the next few years! An excellent example is Sears Holding Corp. When the old Sears had to close most of its stores and reorganize itself the stock sold for $15 a share. When investors realized that the new Sears was in fact a real estate holding company the stock surged to $180 a share over the next three years. Using our stock picking approach you may have found Sears in 2003 and using our analysis approach you might have invested at $15 a share and seen your investment go up twelve fold. And if you continued to pay attention you would have gotten out of Sears in 2007 before it started to slide and the market crashed. Remember that profitable tips for trading stocks also include how to get out with a profit.
