5 Ways to Becoming a Successful Short Term Trader

Becoming successful trading in short term equities in the stock market comes with hard work experience and capital. However for new investors in the market there are already laid down principle for making good return on their investment.

There are risks involved in trading short term equities, and as an investor/trader risking your entire capital on a transaction can be a very risky adventure in the market as the odds are high that you will be out of the stock as soon as it looks even remotely weak. The real risk lies in the fact that while a short term trader cuts his losses, he also cuts his profits. to be a successful short term trader your ability to pick stocks that are going up without much difficulty is important else almost your initial capital and your precious time will be lost.

Here are some tips to help you decide to play the market

1. Using stop loss- each time you enter a trade always have your exit target at heart. A precise short term target will be very helpful in deciding cutting your loss/gains if your stocks move up in price move your stop loss below it until you are satisfied with your gains.

2. Sell immediately if your stock turns southward below your stop loss. Violation of the support line or a strong area of support is a strong warning to exit the position.

3. Consider buying after a stock has pulled back. This will give you a better risk/reward ratio and a tighter stop loss. You need every edge in this endeavor.

4. Construct your trendlines as soon as possible if your stock goes below your trendlines sell the stock

5. Trendlines can prove useful to the short-term trader in another way. A stock in an uptrend may be purchased as it hits the bottom of the trendline. If the stock does not rally off that trendline and continues its decline, then you have a close stop loss.

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