Effective Trading Strategies That Will Expand Your Investment Portfolio – CONAN Daily

day trading (©Adam Nowakowski)

Playing with various financial instruments can be an amazing way to increase your profit margin and expand your investment portfolio. This does not mean, however, that the financial markets are safe for new traders. Given the continuous price swings we witness every day, it can understandably be difficult to determine when to open, close or hold positions.

However, that doesn’t mean you have to lose your hard-earned capital to find a winning strategy. Fortunately, there is a set of well-known trading strategies that you can rely on to start your journey and avoid losses when possible. Interested in knowing more? Just check out our guide below.

Focus on day trading.

If you are still a beginner and want to make the most of daily price swings without taking unnecessary risks, you should definitely try your hand at day trading. In a nutshell, day trading is a variety of short-term trading that involves closing your position before the end of the day. Of course, this means that you won’t have to hold your position for more than a few hours, which is a positive aspect of this type of trading. AT excel in day trading, you need to have a stable internet connection as you will need to monitor prices and market movements minute by minute. Experts recommend focusing on the time window between 9:30 a.m. and 11:30 a.m. because it includes the most significant movements of the day.

Subscribe to an investment research service.

The stock market is very volatile, which is why you need all the backup you can get if you decide to invest your capital there. Luckily, you don’t need to contact an expert trader via outdated methods when you have technology at your side. These days, it’s easier than ever to get the financial advice you need. all you need to do is sign up for an investment research service. Based on this thorough review, you should look for services that are suitable for your skill level, which means that if you are a beginner, you should not waste time on services that provide high-risk predictions. Instead, you should focus on finding a service that caters to traders who have low or medium risk tolerance. Generally speaking, an investment research service analyzes your trades, provides you with forecasts and offers advice to help you determine your next move. As you can see, this is by far the best way to expand your portfolio through investments without incurring major losses.

Say no to penny stocks.

Want to invest just $5 and hit a jackpot? Well, that’s not very realistic, is it? However, that’s what penny stocks are, or at least pretend to be! If you are unknown along with penny stocks, they include shares of small companies that don’t have many buyers. The value of these shares never exceeds $4.99. While investing so little and earning hundreds or even thousands sounds quite nice, it rarely happens, given how illiquid penny’s stocks are. There are instances where penny stocks can be incredibly lucrative, but those odds are so rare that it’s best to avoid these low-cost investments anyway.

Don’t risk all your money.

Setting aside extra money when the market is particularly volatile is really a no-brainer, but it’s still logical to assume that not everyone likes to play it safe. If you want to make short-term gains, you should never invest all your money in trading. Seasoned traders typically only risk up to 2% of their trading capital, and you should definitely do the same. It’s easy to get overconfident and lose all your profits by making a bad trade! So, play smart and devise a long-term contingency plan.

Stand in your position.

Some prefer long-term forms of trading over short-term ones like day trading. Position trading is one of those long-term varieties that depends on holding your position until new trends set in, then closing it when you’re sure you’ll make a profit.

This strategy can be very beneficial to hedge against the sudden swings that usually occur between trends. Nevertheless, it takes a lot of research to predict when the trend in question will stabilize. You cannot also use this strategy in very volatile markets, as trends can change every day or even several times during the same day.

Ensuring your portfolio grows through trading can be an arduous and time-consuming process, but it’s also very rewarding, given that you play your cards right. Whether you’re a fan of short-term strategies like day trading or prefer a more methodical, longer-term approach like position trading, you’re sure to make huge profits using our previous tips. The key, however, is to be patient and spend your time researching the market to increase your chances of generating revenue.

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