Tips to Make Money from Stock Market

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This post throws light on some of the tricks tips and advice's for how to make money from stock market investments:

Here are the Stock Market Investment

• Buy Strength, Sell Weakness

You don't make money from bargains. Cheap stocks often appear to be bargains after a large drop...but they continue to fall.

Buy break outs and sell them higher.

Sell shares that are breaking down.

• Trade active stocks

There are thousands of stocks, but most dont move much. Look at the daily volume and often nothing is traded.

Always trade shares and sectors with volume, that are trending well.

Spreads are the tightest on the most active shares.

Using online resources filter shares that are active.

Observe companies 20 days or less from all time lows or highs.

• Look at shares as if they are people

Stocks often act like people. Each has its own personality. A stock can change from one to another quickly.

• Trade the trend

Don't try to be smart and pick the top or bottoms, jsut trade with the trend.

Using a trailing stop you can lock in profits along the way.

• Add to winning trades. Never add to a losing trade.

Dont listen to experts who advocate averaging down.

Never add to a losing trade, instead add to a winning trade.

if you buy $1 and the stock goes to $1.5, buy some more...

Never average down shorter term trades.

• If the trade is wrong, cut it!

Your first loss is normally the smallest.

If you are expecting something to happen to it and if a share is heading towards your stop, dont move your stop unless there's very good reason.

• If you cant see a trend then don't trade.

Markets and shares don't always trend! If something is not trending, walk away

• Let the winners run

Holding a winning trade is as painful as holding a losing one

To survive, you must let winners run more than losers.

Dont kill off your healthy trade.