Three Ways to Perform Better in Stock Market

Sometimes, if you want to succeed in the stocks market, you need to learn the hard way. Perhaps, you need to lose a few thousands of dollars first, before you realize that you need a better strategy. Stock market allows anyone to join easily. So, it means that people who lack technical knowledge and experience could lose a lot of money. Here are things you should do to finally perform better in stock market:

  1. Stop looking for hidden gems: New traders are more likely seek to find “diamonds in the rough”, i.e. stocks that perform reasonably well, but no one pays attention to it. In reality, it is quite unlikely for experienced stock traders to skip good stocks. If they ignore a stock, then it is likely that the stock doesn’t perform well enough. Most of the time, you will get good profit by trading high volume stocks. You need to seek moderately popular stocks that are gaining steam and quickly decide whether you can make profit from it. It takes experience, analysis and intuition to determine whether a stock really picking up momentum. Traders shouldn’t be late to the party and miss out on decent opportunity to make profit.
  2. Don’t flock to very popular stocks with huge gains: New traders often flock to stocks that saw the biggest gains recently. This is obvious to everybody, including major investors who trade millions of dollars each day. After you buy the stock, you may find that the stock runs out of buyer and you can’t sell the stock at higher prices. It means that you should choose stocks with good balance between investors and buyers. When the stock value goes up, there will be fewer and fewer buyers. Finally, the value will reach its peak and once it drops, there will be no buyers left. You can only watch the value of your stocks plummet and once you are able to sell it, you may get dismal profit at most.

Don’t trust Wall Street analysis so much: Wall Street is obviously a place where experience and major investors gather. However, it doesn’t mean that you can trust everything they say. If they are so knowledgeable, you won’t see market slumps, or even crash over and over again. Major traders in Wall Street could already gain huge profit through small increase in value. Individual traders may only afford to buy a few thousand shares at a time, while major traders can purchase hundreds of thousands in a single transaction. So, even if the stock increases for only 15 cents per share, major traders can get $100,000 or more. So, analysis from Wall Street can be useful only for major traders and not individual traders who can afford far less shares. We also often watch experts on TV and they often sound so smart. However, they are not always the information source. Again, the goal of the TV channel is to boost ratings and attract viewers. The paid experts could give you only general analysis and it’s not compelling enough to justify investing in specific stocks

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