First, a few basic questions:
Does any market make you laugh? What’s the funniest market? Which is not funny?
Some Market Trades that Swing Traders Would Like to Think Twice
Is it a good idea to play the “What’s the Odds?” game? This one comes from the book ‘A Closer Look’…
What’s the Odds That a Stock Will Decline?
In my own personal experience, stock markets are pretty unpredictable. They are sometimes oversold and sometimes overbought. They aren’t perfect markets, though. That’s why it’s so important to play a “Swing” game.
This one is more of a general advice:
When in doubt, stay in the “Swing” game
It is possible to do more good in less time to do the same amount of good. It might feel “more” good overall, but if you do it a lot of times on a large scale, sooner or later you will wind up hurting yourself.
How often should you be playing the stock market? I’ve said that in the previous column, but I think it’s best to make it a rule of play.
Swing trade – 5 minutes every 30 days
Swing trade – 10 minutes every day
I’ve written a bit more about investing in general here in a previous interview with Steve Westly. In summary, my personal recommendation is to use a stock portfolio to generate some interest for the money that you have available. Once you have a bit of money saved, make a couple (up to 5) monthly trades. Do this with different stocks and see how much progress they make. Remember, most of these trades should be small, but I have seen some really big swings. It’s not necessarily a “success” swing, just one that provides a nice little windfall for you.
The key is to make the trades you can do when you have money on the line. In investing terms we say you “can’t have your cake.
To learn more about the different types of investment and financial instruments, you can check out one of my recent interviews here (on one of my favorite investment tools… Mutual Funds).
I’ll finish off by saying a lot of the success of a swinging trade can be attributed to the psychological aspect. If something works for you, that’s great. It could be that your mind just likes