Everyone wants to get on top when it comes to managing stocks and purchases. With all that competition, though, how do you set yourself apart from the pack and really hit your stock market stride? Well, with just a handful of helpful tips and strategies, we can help you get a leg up on the rest of the crowd. Here’s what we’ve got:
1. Keep an Eye out for Pivot Points in the Stock Market
In the investing world, pivot points refer to specific moments in a stock’s history where the price average takes a sudden turn. Sudden spikes in a stock’s value could mean that a new business decision by the shareholders has been favorably received. If caught early enough, this is a great place to get in on the ground floor and enjoy the upswell.
In a similar vein, keep an eye out for sudden drops, which could mean controversy or poorly-received news, which might be a sign to stay away or get out. There’s even ways to calculate when a stock has hit a pivot point, which you can learn more about here.
Cross-checking pivot points in a stock’s lifecycle with news about the company can give you a great idea as to its tendencies and help you predict it in the future. Keeping an eye on upcoming news on a company is a great way to predict it as well. Investor’s meeting coming up? There’ll definitely be a pivot point there, for better or for worse, and prepping for it can help you get ahead.
2. Try to Keep Emotional Attachments at Arms’ Length
We all have companies that we love and support. A favorite that gives you the best products or support, and that you want to support in turn. Having companies like that is, of course, fine, but if you want to get ahead in the stock market world you need to recognize a sinking ship when you see one. It can be hard to be objective at times, but don’t let yourself get sunk alongside them – offload your favorites if things look grim.
Setting yourself a set of rules for buying and selling can help in this case. Give yourself a limit as to just how much to invest on particular stocks, and be honest with yourself. Don’t let yourself feel too guilty when dealing with those precious to you, and if things do happen to go south…
3. Set Yourself a Stock Market Loss Boundary
It happens to everyone. You went in on a stock you thought was a sure-fire hit. And then it fell like a lead balloon. Its unfortunate, but prepping for this scenario early on is a great way to keep yourself afloat. Set yourself a limit for how low the stock can go before you’re out. You can do this either on your own discretion or automatically via stop loss orders. Some pros recommend around 8% loss before you back out, but it’s up to your personal preference when enough is enough.
4. Focus on Stock Market Quality over Quantity
Plenty of new investors make the same mistake: they go hog wild and buy into too many different stocks at once, making their list a nightmare to sort through. Having so many can spell disaster for an fledgling investor who’s not used to keeping track of their different stocks. Don’t make the same mistake – research and investigate the companies you’re looking at and their history to make sure it’s a sound investment.
Once you’ve done that, then dive in on the most promising of those options and make your move. Keep in mind that the more stocks you have, the more time it generally takes to keep tabs on all of them. Find a nice middle ground you’re comfortable with, and try to stay in that range and not stretch yourself too thin. Your wits and wallet will thank you for it.
5. Post-Analysis is Key for Getting Ahead in the Stock Market
If you don’t learn from your own successes and mistakes, then you won’t ever be prepared to minimize the latter and bolster the former. Doing an analysis on what happened in the case of a boom or a bust is just the way to go about it. Did you make a killing on that one risky stock? Maybe it wasn’t as risky as you thought it was. Or, perhaps, you just got lucky?
On the other side, was your surefire hit actually a stinker? Where did it all go wrong? Figuring it out with a postmortem review can help you make better choices in the future to keep you out of the pitfalls and perils and net you that handsome reward.
6. Recognize the Telltale Signs of a Stock Market Smash Hit
Investing in startups or companies new to the stock market can be difficult. It’s a risky time to hop in, but if you play your cards right and know what to look for, investing in newcomers could be your big windfall. There’s a few things to look for when investigating startup stocks – big investor interest, publicity, and early market trends.
- If an up-and-comer company catches the attention of prominent investors, it’s probably worthwhile for you to pay attention as well.
- Big publicity about a company going public on the market or similar news trends can also help with identifying your opportunity.
- Finally, and most importantly, watch the early market activity on the stock. On average, most successful stocks end up with about a 20% increase in value in 7-8 weeks. If the value hits that point well ahead of time, stay onboard. You might just be on the money train.
7. Watch for the Stock Market Rebound
When a stock is tanking, and hey, it happens, there’s often small windows where investors or the parent company will attempt a rebound. In case you didn’t know, this is a series of small value swells that a stock will experience on its way down the charts. Usually instigated by hopefuls clinging to what they figured was a good investment, or by the company to reinvigorate interest, this is one last opportunity to bounce back.
If you bungled up a purchase and end up with a sour spot in your portfolio, watching for these rebounds is a last chance to recoup some losses and keep yourself out of the hole. Mistakes happen, but there’s always a chance to make the most of it and learn for the future.
Getting ahead in the stock market is never a surefire proposition. There’s always somewhat of a gamble involved, but knowing the game always helps. Being able to identify different situations and the correct actions to take in response is the best way to deal with the twists and turns of the stock market. Using information like the tips in this article can help you play the stock market game smarter, mitigate and minimize risks, and capitalize on success.