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Stock Market Strategies
Written by Shaun Rosenberg   
Wednesday, 17 March 2010 09:11
The stock market can be a powerful way to increase your wealth. There are many different strategies out there which people use to take full advantage of it. Everybody is different, but all traders will fit into one of these trading types.
by ShaunRosenberg


The stock market can be a powerful way to increase your wealth. There are many different strategies out there which people use to take full advantage of it. Everybody is different, but all traders will fit into one of these trading types.

1. Buying and Holding

Most people preach the buy and hold strategy. That is because it is simple, passive and most people can do it without much effort. How long does it really take to buy a couple mutual funds or ETFs and forget about it after all? Because stocks historically go up over the long term this can be a relatively safe way of investing, if you invest into a stock long enough.

1. Following the Trend

Another strategy which is similar to buy and hold, but can be much more powerful is trend trading. This strategy involves buying stocks that are trending up and holding onto them until they are no longer going up. This way you can get into stocks that are making the big moves and get out of them as they start to pullback or trend sideways. It may sound simple, but sometimes simplicity works.

3. Swing Trading

Swing traders use technical indicators to buy and sell stocks in the short term in order to make profit when all is said and done. Any trade that takes over 1 day and has a profit target as well as a stop loss can be considered to be a swing trade.

4. Trading Options

Options give buyers the right to buy or sell a stock at a specific price on or before a specific date. Basically it gives traders a way to greatly increase their returns on stock trades. This works best for traders who are already profitable trend trading or swing trading because it can be a fast way to lose money if you have no idea what you are doing.

5. Short Term Day Trading

Day trading is exactly what the name suggests. You buy and sell stock within one day in order to make money on the small moves that occur throughout the day. Day traders are not always profitable, but over the long term it can be a great way to make money.

Every strategy has its ups and downs. But it is up to the individual trader to determine which one fits them the best. Learning the basics of each and experimenting with them can help you determine how you want to approach the market.

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