Safety First Investing Stock Strategies
Learn simple stock strategies which will improve your monthly return to twenty percent on average.
Currently, the stock market has become one of the hottest topics when people are discussing quick ways to pocket enough money to purchase a new car, new house, and even in some cases, retire. Many people believe that the stock market is too volatile though, but if you take a little time to practice several safety first investment strategies, you, too, can profit from this opportunistic time in the stock market. These strategies should be read and practiced, and then applied to real market situations.
Rolling Stock: The rolling stock strategy involves the most simplistic idea of all when buying and selling stock; buy low, sell high. It does not get much easier than this. The strategy involves finding stocks which continuously roll from one price to another. When looking at a chart on a stock, look for repeated fluctuations between a certain high point and low point. If you can define a certain support level (a low point for a stock) and a resistence level (a high point for a stock), then you can wait for the stock to lower to the support level. Once the stock has reached support, you need to purchase the stock and then simply wait for the stock to reach the resistence level. Sell the stock upon reaching the resistence level. Try to use this strategy with cheaper stocks, because it is more successful when purchasing more shares. Look for stocks around five to fifteen dollars.
Bottom Fishing: Bottom fishing also revolves around the "buy low, sell high" principle. If you believe that a stock is highly undervalued, then it is a great chance to turn a very successful profit. Bottom fishing includes looking for stocks that have recently released really bad news, stocks that are prime for a turnaround, companies just coming public or entering a new exchange, or companies which have been beaten down and now are coming out with good earnings or other news.
Peaks: A peak play involves a quick thirty minute to one hour play at the stock market open, which can result in a quick couple of hundred dollars. If a stock moved up considerably during the previous trading day for apparently no reason, then you can look to play the stock back down on a slight dip during the first hour of trading. This play should be quick. Just look for a quick half-a-point to one full point move out of the stock to the down side in the morning.
Slams: A slam play is the exact opposite play as a peak play. You need to look for stocks which got "slammed" the day before and then look to get a small move out of the stock in the morning to the upside.
Covered Calls: Covered calls involve owning the actual shares of a company and then selling calls of the same company to another buyer. If you sell a call option one to two strike prices out of the money, you can make the premium off selling the calls and still keep your stock as long as the stock price never reaches the strike price. This strategy can be used to make almost twenty percent a month on your money with very minimal risk.
Bull Call Spreads: When doing a bull call spread you should sell one call one strike price in the money and buy another call one strike price below the one you sold. This strategy should be used on well seasoned companies that seem to be briefly undervalued. As long as the price of the stock remains above the price of the call you sold, you will be able to keep the premium money for profit. This strategy allows you to figure out your profit and risk before even entering the trade.
Bull Put Spreads: This strategy consists of the purchase of one put and the sale of a higher put. In this case, we want the stock to go up. When doing a Bull Put Spread, our favorite technique, you should usually buy one month out on your options. The profit you will receive from the spread can be figured by subtracting the price you paid to buy the put at the lower price from the amount you received for selling the put at the higher price.
Remember to practice these simple strategies before entering the market with real money. By following these strategies you too can earn extra money to put towards your everyday payments and hopefully make your life a little easier when you need extra cash. Good luck and successful investing.