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What are the best stocks to trade?
For most people, they base the answer to that
question on tips they have received by others who
they perceive as more in tune with the market. Its
an easy way to pick stocks. Its also an easy way to
lose money.
You wouldn't bet on a horse or buy some land in
Florida just because a guy in your office says its a
sure bet. So why would you do it with stocks? The
problem for most people is that there is so much
information available, its difficult to make a
decision. Do you buy based on charts? Based on
fundamentals? Based on intuition?
Sometimes, its a combination of all three.
Its surprising how many people have asked me to take
their $500, pick a penny stock, and give them a call
when its worth $10 000 sometime next week. It simply
doesn't work that way. Anyone who tells you that, is
trying to fool you. To quote Gordon Gekko - "a fool
and his money should never have been together in the
first place". So unless you are a fool, in which
case, hand over your $500 and I'll give you a call
when its $10k, do yourself a favor, and learn a bit
about investing.
Learning about stocks doesn't have to be difficult.
You just have to know what you're looking for. What
type of trading style matches your ability to
trade and your willingness to risk your hard earned
cash.
While
penny stocks will give you the biggest reward,
its also matched by the biggest risk. Trading
futures will give you even more of a return, but you
risk much more. Blue chip lowers your risk and
provides lower returns. Scalping, momentum and day
trading all require you to be glued to your monitor.
There's good money to be made doing it, but, you
need to sit in front of your computer each and every
day, ready to sell or buy when conditions are right.
So what is the best stock to invest in? The answer
changes every day, and for the most part, it depends
on what level of risk you want to take on. Remember,
there are tens of thousands of publicly traded
companies out there. Once you figure out what type
of investor you are, you'll narrow that list down
significantly until you find the right trading
opportunity for you.
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