How to Win in the Stock Market
For investors in the stock market who are scratching their heads wondering how it all happened, and where all the money went, here are some answers on how to win in the stock market using money management strategies.
No, it's not options buying or something wacky or foolish...simply practice what is considered good money management with your stock market portfolio.
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Instructions
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Here are a couple of money management techniques you can use for your stock market account.
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Pay attention now as these two ideas for your stock market portfolio may make you more money over your investing career than any other "hot tip" you might ever get.
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Let's say you have a hot stock that is going up and up and you have now doubled your money.
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When you double your money, if you cash out HALF your winnings in your stock portfolio you get your investment back.
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What's left is the "house money". You can now play with the "house money", not your own money. Fun, huh? It's called OPM(Other People's Money).
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You can keep the stock and let it run. To limit risk or loss you could place a trailing stop on it. Talk to your licensed broker and have them explain if you are not familiar with the term.
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Having a trailing stop on your stock automatically sells the stock when it hits a price you choose and that limits your losses.
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The two money management techniques are basically when you double your money, you sell half to get your investment back, you let your winners ride, and use trailing stops in the market to limit risk of capital.
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Tips & Warnings
Do your research on the stock market and know the difference between stops and trailing stops.
With trailing stops the stock will sell at your chosen price so you limit risk of losing your capital.
Always work with your broker.
The author is pointing out a business technique that is discussed everywhere and takes no responsibility for any actions by any reader.
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Comments
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Nephilian
Apr 19, 2009
Always interested in stock advice. Good article. 5* -
goodselfme
Apr 03, 2009
thank you for this investing tip.
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ilivetoteach
Apr 02, 2009
Thank you for the info. This makes good sense. *5
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Sarah Wilson CCRP
Apr 02, 2009
That sounds interesting.
