Online Stock Trading Tips

Those who trade in the stock markets have to consider many aspects related to:

1. Investment decision

2. How much to invest

3. What to invest in

4. When to invest etc.

The stock market can be a tricky place for newcomers as it is vast and capricious. Those who trade in the financial markets must be vigilant towards the changes and be able to improve or change their strategies accordingly to be able to enjoy success. This article discusses a few tips that stock market traders can make use of:

a) Keep in mind the time to trade

According to many seasoned stock market traders who have made a name for themselves from these markets, the best time to trade is usually the slot between 1:00 PM to 2:30 PM. The reason being that around this time almost everyone is working and all the organizations are functioning. Also any effects as a result of any global or local events that might have a direct or indirect influence on the financial markets will have been absorbed or settled by mid-day; thus curbing risks for those that trade after 1 PM.

There should be no abrupt changes in the stock markets at that time of the day. The daily happenings of the state of affairs have been digested with no abruptness to cause stir or changes in the market that usually affects the stock markets in the mornings. Additionally, by this time the corporate earnings reports have also been released.

b) Buy the stocks that are being traded at $10 a share

Other than a few close end funds, all stocks traded at $10 or more should be preferred. These close end funds are traded at a lower value since the management wants to keep the share price affordable to small and medium investors. However, when trading in the stock markets it must be considered that:

1. Lower than $10 stocks are more often quoted at greater percentage spreads between the buying and selling prices. Therefore, the investors will require a higher price to break even.

2. More often companies that are prone to financial troubles or bankruptcy have low-priced stocks

This is the reason stock market investors are advised to choose stocks with a trading value of more than $10 a share.

c) Best time of the month for stocks

When it comes to buying stocks, individuals who trade in the financial markets should be vigilant about the time period when:

1. The cash flows into the market and is at its lower ebb

2. The prices are low

The best time for people trading in the stock markets to invest in buying the stocks is from the 18th through to the 22nd. It is preferred that financial market traders become aggressive at buying stocks during the months of September and October. However, those who are looking to sell their stocks should choose the first two and the last two days of any month. Also, the best months to sell stocks are considered to be April and early May.