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Thursday, December 31, 2009

Hot Stocks are A Winning Gamble

By Mike Malley

The method in the exchange has usually been buy low sell high. The strategy of hot or momentum stocks is buy high and sell higher. The idea is to watch for stocks a rising in value, buy them and then sell when they stabilise or start to lose value. By trading this way, you don't have to keep hold of the stock as long.

Instead of buying undervalued stocks and waiting weeks or months for them to rise in worth, with the hot stocks approach, you purchase stocks that are rising in value. Instead of holding the stocks, you wait only a short time and sell them when their value is higher than the price you paid. You turn a fast profit.

This approach works very well for day traders. You need to have your finger on the market's heart beat. When you see a stock that is rising in worth continuously, you purchase the stock. Have a time limit set for holding the stock before you purchase. You can even sell the stock the same day as you bought.

If you chose a hot stock that turns out not to be so hot, lose it right away even if you've got to sell unable. Holding on to the stock after it starts to drop could bring a much bigger loss. The stock market is a bet and sometimes you lose. Minimize your losses.

Hot stocks are brief investments and shouldn't be held onto for more than a day or 2. Stay on top of the market trends and your stock costs so you can sell at the most advantageous time. This method of investment has risks and infrequently you'll lose. That's's alright. The most important thing is to chose more winners than losers.

Don't put all of your money into hot stocks. This is just a way to turn a profit in the stock exchange. Investors should have a portfolio with solid stocks from different areas of business to guard their investments. Don't neglect your long term investments in favor of hot stocks. Some of your profits from hot stocks should be put into long tern investments.

The idea with hot stocks is to get in and get out. Even if the stock continues to go up after you sell, its not money out of your pocket. Remember it might just have simply dropped and cost money. Buy, watch the price and sell when you have a decent return on your investment. Do not be greedy.

If you are paying a brokerage for your investments, hot stocks isn't an option for you. Brokerage costs can quickly swallow your profits. Look into online stock services that charge a set weekly or monthly fee for unlimited trades. Trans action charges can be really pricey. Let your brokerage firm handle your long term investments, take care of your hot stocks yourself.

the market is a good way to grow your investments. Hot stocks is a method to make reasonable profits in a short period of time. When investing your money always use more than one system and ensure that at least part of your money is in a safe, if low yield, finance instrument. Never gamble on the market with money you are unable to afford to lose. Remember the old Wall St. Saying" often you eat the bear, and occasionally the bear eats you." Good luck! - 23208

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