Do you want to know what is ceracare review and the best way to trade stocks?
There are many ways to trade stocks and very different ones.
I have my favorite, but it does not have to coincide with that of others.
There is a lot of competition in how to trade in the big world stock markets.
Also, I confess something to you: stocks are my favorite market to trade.
It took me a few years to realize this, more than anything because it is challenging to discover which trading style is best for each.
The latter becomes even more difficult today, with many options and ads pushing us to do a sure thing.
We are going to see the six most popular stock trading styles, although, within each of them, we have a world.
6 Methods for Stock Trading
First of all, it is not trading. However, we have to take this trading style into account because, in the end, it is the one that would suit many people, especially those who do not have the time or the talent to trade these markets.
1 Buy and Hold
This first way of trading shares is known as “buy and hold” in Anglo-Saxon stock market circles.
It is about investing for the long term, which is different from pure stock trading, but because of its popularity and efficiency, we have to consider this.
Within this “Buy and hold,” we have a wide variety of sub-systems.
We have investments by value, dividends, momentum, and index.
All these variants have their defenders and detractors.
But the truth is that all of them behave under the same principle: investing in the long term.
Depending on the long-term stock market cycles, some strategies will work a little better than others, but there will be no significant differences in the end.
In general, if you are a more conservative investor, a dividend strategy would be good for you.
On the contrary, if you are a more daring investor, you could try looking for momentum stocks, which are usually among the hottest and most famous of the given moment.
Depending on when we buy or sell, we will have a great variety of long-term returns.
Let’s look at a simple example.
We have two investors: A and B.
They both buy Apple stock to invest for the long term.
The A bought in May 2015.
B, who follows a value-type strategy, decides not to buy on that date because he thinks Apple’s price doesn’t have much value (he thinks it’s somewhat expensive).
One year later, investor A lost 30%.
Investor B decides that now there is value because the price has that 30% discount and buys.
A year later that investor B gained 60%.
At the same time, the A has gained just over 5%.
Do we see the difference between applying different purchasing strategies?
This does not mean that investor B’s strategy will always work out because, often, when “investor A” buys, the share price rises non-stop for years.
Well, as we can see, this way of buying shares to invest in the long term is straightforward.
We choose our preferred values; We decide if it is time to buy, and if we do, we usually maintain the investment for a period of years.
An excellent way to put long-term savings, no doubt.
2 Position trading
This second way is a kind of hybrid between investment (which we have just seen) and short-term trading.
In this case, we maintain the position for weeks, months, or even years, depending on each case.
These trades do not require frequent trading—something ideal for most operators.
For me, it is a strategy that I like and applies often.
However, I do not recommend it to those who do not have experience in the markets because we have to know what we are doing in terms of general risk and position.
Because I like?
Well, because in this strategy, we have to pay attention to the long-term charts, we will try to trade significant stock market trends.
That makes us more patient and think carefully about what we will do.
For this style, we can use both fundamental analysis and technical analysis.
Some prefer the first, and others, like me, the second.
I find it easier to trade based on price action.
But I do not fail to recognize that the great scholars of fundamental analysis can draw exciting results.
Both models require something: hard work.
I do not think it will be easy because implementing it is a simple trading method.
3 Trading overnight or after-hours
I want to comment on it without being a way of trading different from the others in itself because it is another strategy that some people use, especially in the North American markets.
The characteristic of this type of trading is that the operators start trading when the market is closed.
As we already know, the stock markets usually open in the morning and close in the afternoon.
In the case of New York, that schedule is from 9:30 to 4:00 pm.
As you can see, there are not many hours to negotiate.
Just six and a half hours.
Hence it is not surprising that many people try to trade at times when the primary market is closed.
Those moments are usually when there are more economical and company announcements, with sometimes wild movements.
For this, in the United States, this trade is offered from 4 to 8:00 pm (after-hours) and from 7:00 to 9:30 am (pre-market).
You can see the opening and closing hours of the NYSE here.
Some people prefer this type of trading because they can trade those cheap announcements or find unique opportunities.
Also, many US traders work during the day, so they cannot trade during regular hours. This way, they can change after they get home from work.
Disadvantages such as low liquidity, high spreads, and volatility must also be taken into account.
It is not a system I like personally, nor do I use it in my strategies, but it is there for anyone who wants to use it.
4-day trading
Here we come to the real monster of online trading.
Without a doubt, the most popular way of trading in the world, which does not mean that it is the best, at least for our pockets.
Why am I saying this?
Because it is in this style that it can be said that “95% of traders lose”, so well known.
In Buy and Hold, it is difficult to lose in the long term, although it is true that it is difficult to win a lot.
In positional trading, you can lose but even doing it severely takes a long time.
However, losing your shirt in a few trading sessions is not tricky in day trading.
It is also true that it is easier to earn money quickly.
But the question here is whether we can maintain those profit ratios in the long run.
Stock day trading, as I said, is prevalent. However, in my opinion, it is not as efficient as futures or even Forex or index CFDs could be.
Those markets offer much more suitable volatility and trading costs for day traders.
Stocks have more trouble offering optimal conditions in day trading, as sometimes they don’t move enough to justify the costs we pay, especially for small speculators.
If we are significant, there is not much problem, but we are not all big, do you think?
We can take day total trade shares and also CFDs.
With total shares, some brokers offer leverage of 2 or even 4:1 (with certain conditions).
In those cases, you will have to study if it is worth buying a specific volume for the cost that this will entail, in addition to studying the volatility of the market in question.
In the case of CFDs, the leverage is usually 5:1, but in this case, the trading conditions are usually somewhat worse, at least in most brokers.
I do not recommend day trading stock CFDs, at least in most cases.
As for the day trading strategies of these assets, we face a whole world. They are innumerable and will depend on the system we are studying.
Technical analysis reaches its full importance here.
I think no intraday trader does not use at least one such measure to choose their trades.
Therefore, if you want to specialize in this operating method, study that analysis well.
Five scalping
This way would be one of the variants of day trading, but since it is so popular, I put it separately.
Within the intraday, this scalping would become extreme short-term trading.
The fundamental characteristic of this type of trading is that the operations usually last seconds or minutes.
We are talking about a very specialized operation requiring an exquisite technique.
Do not think that by learning the concept and watching two youtube videos, you are ready to become a professional scalper.
If it were that easy.
As in the previous case, with intraday, I think this style is better suited to futures markets or even Forex.
This is due to the issue of the cost of trading, both spread and commission.
The key is to buy the stock at the right time, usually when the price is moving in one direction, and close soon after when you’ve accumulated a few profit points.
Many so-called experts in the industry try to attract the attention of interested parties with typical claims that they can earn 500 or 1,000 dollars in a minute.
Unfortunately, most of those who claim that are usually scammers looking to take advantage of inexperienced traders who believe those fairy tales.
They don’t tell you there’s also a perfect chance that the price will turn around and move a few points against you, thus losing that $500 or $1,000 plus commission (and spread).
It would help if you were a real expert to win in this trading style.
An excellent way to learn to the scalp is in the Forex market, where with micro-lots of 1,000 units, we can make operations of 5 or 7 pips in a few minutes and see if the system is as easy as it seems.
That way, you would only lose 0.5 euros or dollars per trade, which would not be as disastrous as losing 500.
Better yet, do it in demo mode, and you risk nothing. However, there is nothing like doing it with real money.
Six swing trading
At last, we come to the previous mode of stock trading.
Yes, this is my favorite way to trade these markets.
Although sometimes use a mixture of swing and positional trading since this concept would be a kind of variation of the first.
Anyway, what is this swing trading about?
Well, the trading method is between day trading and long-term investment.
That means the positions will last days, weeks, or months.
In many cases, I can close even on the same day; in many others, I let the operation run for months.
What is the advantage of this system?
Above all, it allows you to take advantage of long-term market trends, both bullish and bearish.
This isn’t easy to achieve in day trading.
On the contrary, long-term investment is the best to find those trends. Still, suppose security is very volatile. In that case, we will lose a lot of opportunities, which does not happen with swing trading, which always allows us to enter operations again when the price moves significantly to one side of the market.
As for leverage, it is a system in which we can use as much power as day trading because I do not hesitate to use almost up to 5:1 on occasions—something we can’t do in long-term investing, where we have to go with 1:1 leverage.
Another advantage, especially with day trading, is that trading costs are less important because we are looking for large movements of 5, 10 15%, or more.
If the total cost of the operation is 0.2%, it is not significant if we look for movements of 10%.
Now, if we day trade and look for a 1% movement, that 0.2% does become significant, and in the long run, it will weigh like a slab on our trading.
How can we trade stocks’ swing styles?
We can bet in favor of the trend or against its ending.
I’m telling you, you’d better go looking for the primary trend, whether it’s up or down.
Going against the market is usually expensive in the long term.
To swing reverse trade, one must be a highly experienced trader with a refined technique.
It’s hard to reach it. But when it’s done, it’s worth it.
What are the best stocks to day trade?
This is an easy question: the ones with the most liquidity and the most popular in the market are almost always the same.
Some of the same today would be (note that this will change in the future):
Manzana
Amazon (you are interested in “why invest in Amazon” or “how to buy Amazon shares”)
Facebook
Microsoft
Alphabet (Nvidia)
Tesla Motors
Netflix
That is for the United States. For Spain, we would have:
Inditex
Iberdrola
Santander
Cellnex (Read more 👉🏻 Invest in Cellnex)
Siemens Gamesa (Read more 👉🏻 Invest in Siemens Gamesa)
If we want to do day trading with shares, we should focus on the values showing more solidity in their movements and market depth.
For tiny traders, there shouldn’t be much of a problem with most of the extensive stocks on the S&P500 or IBEX35, but as the size of a trader’s account increases, it is best to try only to trade stocks with excellent depth of market to sell. In day trading.
The standouts for this are the most significant US stocks, some of which have more capitalization than many entire stock markets in other countries. For example, Apple or Amazon.
This is when it comes to day trading, where liquidity prevails.
Best stocks for swing trading
If we want to swing trading with operations that last weeks or months, we can now choose between a more significant number of guaranteed actions.
In this case, the main parameter will be volatility, although without forgetting that we should not choose securities that have almost no liquidity either.
For example, in 2020, Solaria and Siemens Gamesa had a lot of volatility, but the latter was better for day trading, as it had ten times more liquidity. In terms of volatility, Gamesa outperformed the largest, so it could have been better for swing trading.
Advantages and Disadvantages of Trading Stocks
✔️ It is ideal for swing trading strategies due to the amplitude of the movements (volatility) and the marked trends.
✔️ It is a market that offers thousands of assets worldwide, especially in the United States and Europe, although there are also compelling markets in Asia. This means that there is always the possibility of finding hot values.
✔️ It is a market that is highly diversified by sectors. This means we can invest or operate in securities representing all global economic sectors. If the social media industry is strong, there will be shares of it to trade. This applies to energy, finance, construction, and any sector and sub-sector that comes to mind.
✔️ It also allows you to diversify by country. This means that if there is a scorching country, we can focus our operations on its actions, Japan or Australia, to give two examples. For this, you only need a broker with an international offer.
✔️ It is a very professionalized market in the world, and there are countless resources where you can follow comments and all kinds of exciting news, as well as macroeconomic announcements of all kinds.
✔️ Ideal market to operate with a view more in the medium-long term. If we want, we can extend it to create investment portfolios, with the benefits that this brings: dividends and possible capital appreciation.
❌ It may not be the most suitable market for novice traders because it requires learning before mastering it with more or less a guarantee of not losing. Be careful; I’m not saying about winning a lot, but about not losing, which is the first thing we should expect to reach. When we are so good at trading that we do not fail, then we can start thinking about obtaining consistent positive returns.
❌ Intraday trading costs can be pretty high at certain stock brokers. It is better to study the volatility of the assets and the associated costs and see if this type of trading is possible or worthwhile. It is usually trading dominated by professionals and dealers (like the rest).
❌ They do not usually offer leverage, although there are brokers that can allow you to use credit, like some in Spain, or a margin of 25% like Interactive Brokers, although in this case, to negotiate with those conditions in the US market, you have to have a minimum balance of $25,000.
❌ Huge gap events can occur in the market with falls of more than 20% (or rises), which makes this trading very dangerous, mainly if some leverage is used.
❌ For an efficient operation in stock swing trading, the trader needs to have experience and be clear about risk management concepts in a varied stock portfolio; it’s still not easy.
Conclusion – stock trading opinions
broker opinion
As we have seen, we have these six ways, but in reality, we can reduce them to 3, which are the main ones and from which the others derive:
Long-term investment
swing trading
day trading
The first is measured in years, the second in days, weeks, or months, and the third in hours or minutes.
Which is your favorite?
In my case, I have been clear: swing trading or positional trading, or rather a mixture of both. In some cases, I use a strategy that we could consider more of a position, while my trades last a little less in other cases.
It doesn’t matter which way it is.
Ultimately, the important thing is to win in the long term and adopt the strategy that best suits our circumstances.
Honestly, the best thing that most could do is dedicate themselves to investing for the long term.
For swing trading, we will have to dig deeper and spend a lot of time on it. Now, if you like trading, it is a fantastic method.
Day trading; Here, things get more complicated.
If you are going to do it or try it, please be very cautious and study the market well before applying the techniques.
Greetings and good trading
