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Use a Checklist of Stock Trading Tips

Aug 2, 2008
When you regularly trade stocks, it is important to keep a checklist of common stock trading tips close at hand to help you make the best purchases and trades. A sample checklist of these tips could be:

1. Watch the scholastic lead band. Experts say that when this lead band crosses the 20 band, this is the prefect time to buy. If you notice the band is below 80, then this should be your signal to sell.

2. For each stock that you hold, it is important to hold charts in different time periods. If you have charts for 1 minute, 10 minutes, 30 minutes and 60 minutes of trading, you will have a much better view of how well the stock is performing. If you trade seems to be bucking the trend, then you shouldn't hold on to it for very long if you don't want to lose money.

3. Start off trading stocks with lots of shares in the low bracket, such as the 100's. Don't jump in with both feet and order 1000's because you run the risk of losing a lot of money if you don't have enough experience under your belt to know what you are doing.

4. Be wary of consolidations. Most experienced traders do not make trades during periods of consolidation. The best thing to do is to study the trends. Trends are identified by higher highs and lows for an upward trend and lower highs and lows in a downward trend. There should be wide channel between the 5 and 15 moving averages for a strong trend. You can also enter the trend when a breakout price occurs or wait for the price to pull back a little.

5. When trading you have to know where your exit point will be as well as your stop loss value. Although enduring losses is a part of stock market trading, you don't want to hang on to a losing trade hoping things will turn around because it is possible that they won't.

6. Become familiar with the futures. On the NASDAQ, futures do play an important role as the stocks usually move upward or downward with the futures. For example, you should never short a stock if the futures are in a strong upward trend.

7. Consider the trading action of the previous day as well as what is happening at the present time. Subtract the high from the low of the day to find stocks with a rage of $1 or more. Those with larger ranges have more possibilities for earnings.

8. If you notice that some stocks have a significant gap at the open, these are good opportunities for trading because they are likely to have a good swing in both volume and price. The gap is defined as the difference between the amount a stock closed for one day and the amount it opened at on the next day.

9. Look to the Asian and European markets if you want to make a prediction of where the US markets will likely go. In the past US futures have trade downward overnight, but have rebounded in the morning.
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