Tips For Creating The Best Stock Trading Strategy

These days there are so many different factors affecting the value of stocks that it’s nearly impossible to know when to invest without some strategy. A strategy allows you to conduct a comprehensive analysis of a stock for long or short term investments depending on your goals.

You could also use these strategies while diversifying your portfolio by picking the best stocks from different industries and companies worldwide. Having a strategy will help you search for the best stocks to buy, allowing you to invest with confidence.

The basics

More often than not, buying and selling shares in companies with an excellent reputation and record of growth will make you more money; however, if you want to go broke and invest in riskier stocks, be sure to do thorough research beforehand.

Safety first

Never invest all of your money into just one stock trading strategy. Diversification is the key to success – keep some funds on hand so that you won’t lose everything if one particular strategy doesn’t work out.

Have patience

Don’t expect instant results from your investment strategies. Although there are stories of people making millions by purchasing their stocks at the right moment and selling them at the perfect time, these cases are sporadic. Even for experienced investors, seeing consistent double-digit growth in your portfolio might take years. Only invest what you can afford.

Believe in yourself

Of course, no strategy will work without a bit of faith thrown into the mix. The good news is that there are lots of strategies out there, and finding one that works for you won’t be hard if you’ve got some confidence and determination behind you.

Check your numbers

Before you decide on trading stocks, take a good look at the company’s financial records. Although it’s crucial to take past performance into account when evaluating a strategy, it’s also crucial that you look at their balance sheet and cash flow statement if you want to make money from that stock.

Get educated

Always research before buying or selling stocks. The more work you put in now, the more likely it is that your strategies will pay off in the future – not just for this year but for years to come! You could read up on financial reports, watch educational videos online, attend seminars, or even hire a professional who can show you how much potential a particular stock has based on sophisticated algorithms..

Be creative

If you can’t find any suitable strategies out there or if they seem boring to you (who wouldn’t be bored by buying low and selling high?), why not make up your own? You may need to experiment at first but don’t be discouraged – stick with it until you perfect your strategy. You’ll be surprised how rewarding it feels once the investment starts working for you.

Long-term comes first

Never risk all your money in one place. Even if your long-term strategy is set up to make money for you by generating capital gains, this doesn’t mean that you should ignore the potential of short term strategies too. If anything, they can help create a healthy portfolio because they’re less risky than picking stocks yourself and are almost guaranteed to generate some profit!

Keep it simple

Don’t complicate things – sometimes it pays off to be conservative. An essential investment plan would include setting aside some time each week or month to research the markets and price the investment options accordingly, invest when there are good deals on offer, sell your stocks when necessary and so on. You don’t have to get overly technical or creative with your trading just for the sake of it.

Stick to a budget

When making investment decisions, think about how much money you have available and only make investments that won’t use up your resources. For example, if you got HKD 10,000 saved up for investing in stocks but decided to buy one share at HKD 1,000, you’re not thinking logically – after all, what are the chances of that stock doubling anytime soon?

Investors who are good at money management can turn their lack of resources into an advantage by using small amounts to test different strategies before deciding on which ones will provide them with the best returns.

How to Overcome Your Trading Fears?

If you want to be a trader, stress is one of the first things you will have to learn to cope with. Many completely different events can affect the market, so you constantly have to be on your toes and ready to react to take advantage of an opportunity or to simply save your investment. Trading is, therefore, not for everyone, but if you still want to become a trader, you should know that you will most probably face certain trading fears at some point, fears that can easily cloud your judgment. However, there are ways to overcome these trading fears and this is what we want to address in this post. Read on and learn how to improve your chances to end up in the money.

Trading fears | They are actually quite common

First of all, people who decide to trade online often wonder how to find a reliable broker. Unfortunately, scams are not unheard of in this business, so you want to get as much information about your prospective broker as possible. Forums are probably the best place for that because there you can find some genuine feedback from real traders. Next on our list of trading fears is the fear of losing. You probably faced this fear at least once in your life even if you’re not a trader, so the fact that this fear is here should not be a surprise. What you have to realize as a trader is that you cannot win 100% of the time. Losses WILL come and they have to be managed – the important thing is that you’re profitable at the end of the day, month, year. Do not put all your eggs in the same basket; come up with a system or a strategy for your trades.

Trading fears | Learn your limits

Common trading fears often include the fear of missing out, a feeling of desire to own an asset just because something is going on without you. Keep in mind that you cannot be omnipresent and that, if you spread yourself too thin, you won’t be able to cover the latest market developments concerning all your assets. Focus on what you’re good at and try to become an expert in that field. Also, don’t let the fear of letting a profit turn into a loss paralyze you. These things happen when there is an unexpected big market event and there really isn’t much you can do about it. Set a limit of how much change in your assets’ price you’re willing to accept before you decide to react and stick by it.

Trading fears | How do they affect you?

Negatively, of course, but let’s analyze that a bit deeper. Trading is something that challenges you mentally, above all things. It’s not easy to keep a cool head when there’s money on the line and people often act in two completely opposite ways – they either react too quickly and too much or they don’t react at all. If the trades are not going their way, some traders tend to trade much more than usual to make up for the losses, while others don’t dare to make an investment and miss out on many great opportunities. That’s why you need to have something to grab on to when the going gets tough, a sort of lifeline, if you will, to pull you out of that negative mental state. We’ll recommend some methods in the following paragraph.

Trading fears | How to deal with them?

A very helpful trick to help you maintain control of your trading fears is keeping a record of your investments. However, next to all the data concerning these transactions, you should also write down your mental state at the time you were conducting them, so that you know what emotion helps you or obstructs you most. You’d be surprised how much this helps. Furthermore, it is important to pick a strategy and then stick to it for a while. Determine a time period and once that period passes review your strategy’s results. Investing randomly won’t get you very far. Once you have all the data after a period of time, you will be able to make adjustments to increase your strategy’s efficiency. Sticking with a system does wonders to alleviate any trading fears you might have and helps you keep a clear mind.

Trading fears | Conclusion

And that’s about it for this post. The most important thing you can do is to come to terms with the fact that you cannot be right 100% and that you cannot grab every single opportunity that presents itself on the market. We all have our limitations. Come up with a strategy, a system that works for you and stick with it for some time. After that, conduct an analysis and make necessary adjustments. This way, you will leave very little space for trading fears to appear and they will not cloud your judgment because you will always know what to do next. Planning is everything!

Ben Prescott is a senior analyst at With years of experience under his belt, Ben is an expert in both binary options and forex trading. He regularly publishes broker analyses on the aforementioned website and is always happy to give useful tips to people who need them. If you want to some sound investment advice, feel free to contact him there