Stock Trading for Beginners (2) – Stock Trading Strategies

Guides and Tips for Beginners on How to Trade Stocks Online

stock trading for beginners

Beginners Guide to Stock Trading – Decide Stock Trading Strategies


There are three basic stock trading strategies that beginners should be aware of:  day trading, swing trading and long-term investment. A Beginner should decide the trading strategy based on the financial goal and the available time on stock trading.


Day Trading


Day trading is not investing. Day trading refers to the buying and selling stocks on the same day. All positions are usually closed before the market close.  Most day traders focus on a very short-term trading and may buy and sell many times in a single trading day. Day trading is a full-time job because it requires the trader to monitor the market movement closely throughout the trading hours.

Day trading may be highly profitable but requires a lot of market knowledge, skills, experiences and trading discipline;  therefore, it is not recommended for beginners. Many beginners jump into stock day trading and end up with losing a lot of money.


Swing Trading

Swing trading refers to the buying stocks near the bottom of a trend channel in the expectation that the stocks will move up. The stocks are held for a few days or weeks and sold near the top of the channel. Identifying when to enter (buy stocks) and when to exit (sell stocks) is the main challenge for swing traders.

Swing trading is the most popular trading method and most of the traders aim at 5% to 10% profit. It does not need the full-time devotion, but requires the knowledge of stock markets and the skill of analyzing stock charts such as the 20-days’ moving average. Understanding the fundamental of the company is optional but extremely helpful in the selection of potentially winning stocks to trade.


Long-term Investment

A long-term investor usually buys stocks when they are cheap or undervalued and holds them for years or even lifetime. It requires to have a thorough understanding of the business of the company before the investment. Because the goal is long-term, the market volatility is immaterial, and the investor should not panic when the market jitters. Educational funds and 401K plans are two examples.

One of the most import principles of this strategy is diversifying the investments which means not putting all the eggs in one basket. Seeking advice from experienced financial advisors is highly recommended.


Both swing trading and long-term investment are appropriate strategies for beginners to trade stocks online. This website will review the knowledge and skills required for beginners to do swing trading.  




Posted by on Jun 25, 2012 in Stock Market Basics | 0 comments

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