Tips for Successful Stock Trading

The secret to successful stock trading is the unfortunate fact that there are no shortcuts. There is no magic bullet that will show you which exact stock to trade and no special notification that will tell you when to buy or sell. Often, we come upon a fantastic growth stock, but the market has bid up the price beyond any desirable benefit. Sometimes, you know a stock has high intrinsic value and is going to turn a profit, but its investment timeline is just too long. There are as many different stocks as there are investor personalities, and so the only way to seek out the stocks that will work for you is to watch them.

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 A Finger on the Pulse

The market environment is reactionary and ever-changing. Small events or announcements in industry or politics could ripple out to have far-reaching consequences on the stock market. Likewise, global incidents and significant actions—such as China’s sudden regulatory assault on digital giants like Alibaba Group Holding Limited (NASDAQ: BABA)—could shake investor confidence and cause stock values to plummet. There have even been studies conducted to determine how the weather may psychologically affect the moods of traders and their subsequent stock market movements. Therefore, traders need to understand how historical happenings have influenced past markets and recognize the factors that hold sway with current markets. You need to view trading as a lifelong learning process where you grow to understand the nuances of particular stocks and their markets.

Similar to choosing a life partner, being familiar with a company’s financial history is not enough. You need to find out about its directors, its partners, its competitors, its intrinsic value, and more. A prime example, as mentioned in the Hot Stock Roundup, is Xenetic Biosciences Inc (NASDAQ: XBIO). Xenetic jumped over 146 percent in value because one of its key business partners, Takeda Pharmaceuticals Co. Ltd (NYSE: TAK), broke ground on an expansion project. Unless traders had researched Xenetic thoroughly and were aware of their exclusive license agreement with Takeda, they would not have known that Takeda’s $126 million investment in a state-of-the-art manufacturing facility would mean possible enhanced business growth for Xenetic.

Taking the time to truly study how a market works is worth the effort. It will help traders to adapt to other markets and develop a trading plan that is firmly based on facts and information. Thankfully, there are a variety of online resources from podcasts to blogs that can help you to figure out which are the important stocks to watch. Many of these stock watchlists are compiled by professional and seasoned traders with their fingers on the pulse of market developments. By keeping an eye on the potential movers and shakers, traders can get a feel of overall market disposition as well as get prepared for the best time to buy or sell. That said, many watched stocks never end in trades but the sheer act of monitoring these stocks will help traders to build their skills and increase their trading intelligence.

Health is Wealth

While there are many sectors to invest in, consumer staples, information technology, and healthcare remain some of the most visible and reliable. We all need to eat, use our gadgets, and stay alive. So, it is always a good idea to feature at least one of these sectors in your investment plan. The healthcare sector has been challenged with logistical and manufacturing obstacles throughout the pandemic, but it has managed to emerge with an advantage. Due to the ongoing virus outbreak and aging populations in many modern countries, healthcare products and services continue to see heavy demand. This demand is not only confined to conventional healthcare as we know it but also spilling over to peripheral markets such as alternative healthcare products, mHealth, and insurance. Hence, it is prudent to have a list of top healthcare stocks to watch.

The beauty of investing in healthcare is that it will always be relevant. And although pharmaceuticals have been in the spotlight lately, the best investments may not necessarily be that discipline alone. Intuitive Surgical, Inc. (NASDAQ: ISRG) is a perfect example. Intuitive develops precision robots that are designed to facilitate minimally invasive surgery. It is not a renowned company nor is it particularly trendy. However, the robotic surgical system has been utilized in operating rooms for over 20 years and the company has been consistently updating and improving its product in order to stay ahead of its game. With the decline of the pandemic and the return of elective surgeries, Intuitive’s robots are back in the business and their stock has been on the rise.

Trading is as much about you as it is about the market. Whether you prefer risky, fast-moving swings or simple, long-term investments, the secret to your trading success is finding the right stock that fits your style. Even if certain stocks may seem more lucrative, trying to trade in a fashion that you are not accustomed to would most likely end in loss. By sticking to your trade plan and keeping a close watch on key stocks, you can find great opportunities and strike them at the right time.

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