1. Each stock has its own characteristics
And not just each stock, each stock group has its own characteristics. The SnP has its own as a market index. Gradually you start picking them. This gives you edge against randomness, and a base for defining a set of strategies.
2. Regime shifts
Stocks show regime shifts remarkably clear. There will be phases when you will make money in every trade, and there will be phases you won’t get a clue about what’s happening. The phases usually occur when there is a fundamental shift in underlying.
3. Diversification
Diversification isn’t simply buying uncorrelated instruments. For professional traders, a much better form of diversification is trading uncorrelated strategies. This is easier done in stocks than futures.
4. Gaps and Pre-market trading
Gap trading in stocks is still one of the easiest plays for a beginner. There are many types of gap patterns to play and thousands of stocks to choose from. You can choose stock screeners such as Trade-Ideas and get started.
5. Event- based Trading
5 years back things were very easy for scalpers and daytraders (the time I started trading). You could make money just by trading on news only- using a premium news service, of course. Even these days, trading around news events in stocks is easier than in futures. Option spread strategies can be used to their full potential around such events.
6. Trading as well as Investing
Once you start trading profitably in stocks, chances are high that every couple of years you will pick 5-10 great investment stocks. This comes automatically as insight after day to day trading for a long time. Having your investment portfolio is a great way to park your investments.
Why Stocks?
Published on Saturday August 20th, 2011 at 05:13PM by sadscorpion
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