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- Updated 06 Apr 2023
Short-term trading entails. intraday trading, where you buy and sell stocks within a single trading day. It could also include trades where the period between buying and selling ranges from a few days to a few weeks.
Select The Right Stocks To Earn A Regular Income
To earn a regular income from your short-term trades, you need to know two things:
(1) When to buy a stock
(2) When to sell it
How do you get your share market timing right? Here are some tips:
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Assess how stock prices are moving: Observe the price movements for a few weeks. Once you understand the patterns, deciding when to buy and sell becomes easier.
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Monitor the share market live: Invest in stocks or sectors that show positive movements. Reduce your exposure if you’re expecting major declines.
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Evaluate the average price: This informs you how the stock has performed over the years. Usually, good stocks show an average that slopes upward on a graph.
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Diversify your portfolio to spread the risk: That way, if one set of stocks performs poorly, there will be other stocks that do well. So, your portfolio will still generate an income.
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Avoid emotion and bias while investing: Do thorough research on the track record, earnings, and growth prospects of a company. This will help you to make informed trading decisions.
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Set up a stop loss: For instance, you may decide to sell a stock if its price declines 15% below your purchasing price. This could reduce your potential losses over time.
Bottom-Line
Short-term trading could become a dependable source of earnings for you. Just make sure to do your homework first. This will help you to make the right short-term trading decisions.
