If you’ve been trading stocks and shares for a while now, you may be ready to adopt some more advanced techniques and tactics to give you an edge over other traders and to improve your capacity to make a significant profit. In this article, we look at a few relatively straightforward techniques that you can try in order to change up your approach. Before you make any moves, it’s important to always do your research and set yourself limits in order to manage risk as effectively as possible.
Stock market opening hours are between 9:30 am and 4 pm ET. However, there is also the opportunity for pre-market trading – with some platforms permitting sessions starting as early as 1 am. It may not be possible to actively complete transactions throughout this entire duration, but you can also use this time to get to grips with potential trends and patterns that are likely to continue throughout the day.
When there are opportunities for trading, you’ll find that the out-of-hours period has a tendency to be more volatile – which means that offers placed before the opening bell have the potential to generate huge profits. It’s also a very complex time to trade, with certain brokers introducing regulations and levels of commission that are different from those to which they adhere during regular hours. Because of this, and due to the fact that pre-market hours are often quieter, you may be able to find opportunities that no one else can during this period, as long as you have a thorough understanding of what you are doing.
This interesting approach involves not buying but borrowing shares. If a trader has a strong reason to believe that particular stock is soon to diminish in value, they may decide to borrow shares in this particular company, then sell them at market value. Once the stock loses value, the trader then buys it back at its lower rate and returns it to its original owner. This amounts to effectively betting on which shares will decrease in value. It’s a risky strategy, but one that is likely to pay off if you have a strong understanding of the market.
Scalping involves working with exceptionally fast-paced, small-scale changes in stock value. You need to be able to make informed decisions quickly and to always have your eye on the ball if you wish to succeed with a tactic of this kind. If you use scalping as your main technique, you may end up trading hundreds of times per day. It’s a high-risk approach, with one mistake potentially losing you the profits you’ve made from numerous successes, but the payouts that are achievable are huge.
Many traders make decisions in response to tips from financial journalists – but oftentimes, the reports on which these decisions are based can be sensationalized and may lead investors down the wrong path. However, you can use the news to influence your trading decisions.
Instead of studying predicted stock movement, why not check out reports on tech product flops, CEO gaffes, and exciting upcoming developments to try and predict upcoming trends yourself. Of course, there are official sources that can be trusted to give direct advice on the stock market. Just be sure to research them carefully and make informed decisions regarding which you should take seriously.