| The internet is jam packed with so-called independent | | | | swings that make no sense. The trends may show it |
| experts who claim that they made a fortune trading | | | | or the change may be due to external events. Either |
| stocks. They are only too willing to share those tips | | | | way, smart online stock traders live with it and move |
| with you for a price. Maybe you recognize the name | | | | on. Asking "why" is not as important as deciding |
| of the expert, maybe you don't. Which expert is | | | | "what now". |
| right? Here are 10 tips common to the best stock | | | | 6. Yield for Curves Ahead. Once a market move is |
| market trading strategies. | | | | evident, watch for the direction and duration of the |
| 1. Set financial limits. Dumping all your cash into a | | | | trend. Generally a trend move during a bull market is |
| stock hoping for fast return is not investing. You | | | | more likely to be positive. A trend move during a |
| might as well put that money on a horse in the fifth | | | | stalled or bear market is more likely to be negative. |
| race and admit to gambling. Stock market investors | | | | 7. Says who? The internet is jam packed with stock |
| decide how much money to put at risk before | | | | market trading advice from software vendors, online |
| buying. | | | | trading firms, stock market newsletters, analysts and |
| 2. Buy low - sell high. That's the tried and true | | | | people who want to make money from you. How |
| formula for making money in the stock market. The | | | | reliable is their advice? Keep a healthy skepticism |
| problem is determining those points. No magic here, | | | | about whose advice you use in making trading |
| just plenty of analysis and research to achieve that | | | | decisions. |
| simple yet elusive goal. | | | | 8. Expertise is no substitute for Instinct. If technical |
| 3. Price rules, value drools. The best research may | | | | tools alone made for success than the market would |
| show that a stock is undervalued or overvalued but | | | | be packed with millionaires. Instinct leads the pack |
| the proof is in the price. For totally absurd reasons a | | | | when analysis shows up a day late and a few dollars |
| stock price may rise or fall regardless of what you | | | | short. |
| and the experts believe is the value. As with | | | | 9. The Efficient Market does not exist. The Efficient |
| anything, the actual price is what people are willing to | | | | Market Hypothesis is a myth. The idea that the stock |
| pay. | | | | market will benevolently work itself out from peaks |
| 4. What goes up, comes down. Even a Cinderella | | | | and valleys to a level playing field only works in |
| stock on a wild ride to the top is headed back to the | | | | textbook models of capitalism. |
| bottom when the clock strikes midnight. Online stock | | | | 10. Be True to Your School. Consistently apply your |
| traders must get off with some profits before riding | | | | trading strategy. Flipping strategies only leads to |
| their pride to a crushing loss. | | | | confusion. If the latest hot tip does not fit your |
| 5. Change happens. Stocks are subject to directional | | | | trading strategy, it's not for you. |