Using the shares markets to buy and sell stocks and shares is a complicated and risky environment to work in, in a financially sense. There is also no sure fire way to do it, if you talk to ten stock brokers, you will probably get 100 different ways of doing the same thing. There are, however, two very clearly defined paths and one can follow if they are seeking to invest in the stock market.
Short-Term Investment Opportunities
These two paths are polar opposites of each other. Short-Term investment, often referred to as Intraday Trading is an extremely high risk, fast turnaround form of trading. As a short term trader, you start the day with a set amount of stock, or money, and you have until the close of the morning session or if you choose to do it for the whole day, the close of the market, to buy and sell your stocks. The key to this type of trading is quick short term decisions; you buy when the stock is low and you sell when the stock is high, even if low is $0.10 and high is $0.15 your goal as an Intraday trader is to make a profit, any sort of profit.
Long Term Trading
The alternative to Intraday Trading potentially carries less risk but requires the trader to think months and years ahead, instead of minutes. Long Term trading, or Online Share Trading is picking an investment when it is low, with the patience and knowledge and research to stick with it as it slowly increases in value. Unlike its short term counterpart, this type of trading is not about getting out while the going is good, but about absorbing the dips, the small losses, with a view that some time in the future your stock will be a worth a lot more.
Comparison: Intraday Trading Vs Online Share Trading
So if you are venturing out onto the stock markets and are looking at a way of trading, which method do you choose?
Deciding Factor: The Instant Gratification Factor
If you have some money burning a hole in your pocket and you want have a bit of a gamble then short term trading is for you, the nature of it means there is a natural time limit on the amount of time you can buy and sell for and, unless you are really good or really lucky, you are unlikely to make significant amounts of capital from quick transactions over the course of the day, as the probability that you will be holding onto stock as it suddenly spikes is very low.
However, if you goal is the satisfaction of a well developed, well researched investment, or maybe you are trading with stocks that pensions are invested in then long term is the way to go, unless your chosen stock crashes, you will be able to absorb minor losses and, if you have chosen correctly, will make a satisfying profit years later.
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Candice Hubbard had multiple degrees in finance and is seasoned in Online Share Trading. She is currently writing a book about the secrets of Intraday Trading. She also lectures at his local University about the nature of finance and the stock market.
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