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Tips For Stock Trading and Investment

*****Do you feel good about the business?

*****Do you know the management?

*****Do you think the price is OK comparing the peers?

*****Do you know who is the stock promotor?

*****Do you know what kind of investors in that stock?

*****Do you know their financial report?

*****Do you know their market caps?

*****Do you know how much you could afford to lose if the investment collapsed?

Online trading changes the investment scenario. Many investors are just crazy on Internet stocks and online trading. Exciting, heart beating, frustrating, depressing, ... ..., is still for everybody. I am sleeping good every night, since I am not greedy, I am not crazy, I am not going to gamble, I am tired after finishing my DD each night but is still exciting next morning. Please read following Stock Trading and Investment Strategies. I'd like to present to you before you start your serious trading.

*****Listen to other investors' opinion, but don't have to follow. No matter positive or negative news, comments, or posts, just keep in mind for the purpose of your DD. Don't waste time to discuss on some tiny little things or attitudes. You should be very careful on what those Wall Street analysts and experts told you.

*****Research. As I said before, if you didn't check information, or quotes, or whatever at least on 30 different stocks, you will be a risky player or investor. The Dow and other index are for the whole market, sometimes there is nothing to do with your favorite stocks. The analysts usually work for themselvies or certain companies (Recent comments on TTWO, WEBX, YHOO, EBAY, AMZN for example). We never know certain stock is a loser or eventually a winner, we only know it may bother you or favor you for certain time period.

*****Quick action. The advantage of Internet trading or analyzing makes you move fast, either in or out. That is the purpose of stock trading. Each person may be a long term investor or day trader. Don't be fooled, it is trading and investing, it goes either way for everybody. Looking at your portfolio, not on specific stocks.

*****Keep learning. We learn how to trade; we learn how to lose and how to win; we learn how to deal with lying; and learn how to grow. Comparing with other investor group or club, each individual always looks like a child, keep learning is the key.

*****For fun but not gamble. Fun is big part of your life; gamble is little part of your play, if you do big bet, you will lose, at least at most of the time.

*****Check List: Keep a list of investments you'd like to own, as well as a notion of what price you'd be willing to pay.

*****Day Trade or Short Term Trade: Sometimes you get lucky, but don't count on it. Have a selling strategy that limits your exposure when a sector falls. And catch the rebound by keeping a list of stocks you plan to buy when the price is right. How short is short, and how long is long? There is no absolute answer, the correct answer is: keep an eye on it

*****Diversify: Investors will switch from one stock to another for sure. Investors and customers will decide all. This is why you need to diversify your portfolio, it is very, very important. In my opinion, you may pull out at most half of your bloody money on the stock market, and spread your funds at least for different stocks (for example, $2000 for 4, $5,000 for 5, $10,000 for 8, $100,000 for 15 different stocks etc). For experienced investors, discover those new ones; for naive investors, make sure you check the P/E and the company history.

If you follow the rule, 100% investment return per year is a piece of cake for most of you.

Happy investing.

Dr. Tianqi Wang

PS: This post is copyrighted

At time of publication, Dr. Wang may have positions in any stocks mentioned. Dr. Wang often buys and sells securities that are the subject of his tips and information, both before and after the tips are published, and the positions that he takes may change at any time. Under no circumstances does the information in these tips and links represent a recommendation to buy or sell stocks. Dr. Wang's writings provide his own insights into the dynamics of stock market and are not a solicitation for transactions. While he is not a broker, not a market maker, not a financial advisor, and he cannot provide investment advice or recommendations, but he invites you to comment on his above equity investment tips and communicate with him at dohouse@aol.com.

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