How to Make Fast Money Investing in Stocks by Optimizing Short-Term Trading
Whenever people talk about the stock markets, their first impression or response to is that you always get ripped off. However, with much work and practice put into it, there is no doubt that you can be the one next in line to make money in stocks.
Successful people have been able to make money in the stock market, but this didn’t just come easy. It took so much work, perseverance, and research, but in this article, we are going to do the research for you, so all you have to do is to sit back, get focused and keep on reading.
This tutorial is so important for you, especially if you are thinking about getting into stocks or already a newbie at trading. I would try as much as possible to cover all aspects of stock trading to help prevent future losses.
Most people ask “can you make money in stocks?” and my simple reply is yes. If someone is really going to argue that, let’s take a look at common people who made their millions trading in stocks.
People Who Made Money in Stocks (and Still Makes Money till Today)
One of the ways some millionaires became extremely rich is through the stock trading venture, it’s arguably one of the fastest ways to get rich quick but with much risks involved, and it is also the fastest way to go broke.
The stock market has created about thousands of new millionaires, and this trend is likely to continue in the foreseen future.
You might ask yourself if you really have what it takes to make money off stocks and my answer is absolute! Here are two ordinary people who made money off stocks:
Tim Grittani – Penny Stock Trading
Tim Grittani made a decision back in 2010 which changed his life; he took his life savings of $1,500 and invested it in penny stock trading. He patiently traded day-to-day which was a prolonged process. He kept on researching and following tutorials for 3 years.
Then finally, he hit the jackpot. Tim Grittani so far has made millions of dollars only through penny stocks.
Paul Scolardi – Daily Trading
Paul Scolardi, also called “Superman” of the Wall Street, is one of the people who made his first millions trading. He spent most of his time working as a financial accountant for 16 years in a company.
He decided to take a leap of faith to pursue his dreams of being a stock trader, leaving his secure job, he went on to perfect his trading skills.
In 2014 alone, he had a verified gain of over a million dollars alone. In 2015, it took him less than 6 months to rake in another million dollars, and since that time, he has been one of the most successful people in the trade market.
The 2 Most Common Trading’s Time Span
Now we have seen examples of people earning very well from the stock markets, let’s now focus on the steps taken to achieve these feats. But first, let’s look into the Trading time frame.
1. Short-Term Trading
Short-Term trading is a strategy used in trading stocks in which the time frame between it’s buying and selling point is within few days or weeks. However, unlike the Long-Term trading, this is very risky because of the unstable and rapid changes in the nature of the stock market.
This is as a result of specific factors that have major effects on the stock’s price, negatively and positively – they include the media/company news, consumers attitudes towards the products of the company and company reports.
Let’s look at why you should go for the short-term trading strategy (which we are handling in this article) and the dangers in it.
• Short-term trading can give you control of your money as you buy and sell within the short time frame.
• Short-term trading can yield high growth potential making it the fastest way to make money.
• Even if you lose money, the risks are short-termed.
• It involves a volatile market, making changes in stock trends. In addition to creating a massive amount of money in a short period of time, it can be risky and can lose a great amount in a short period of time
• It is very stressful.
• Ironically, it consumes time.
2. Long-term Trading
These are strategies used in trading, in stocks which the time frame between its buying and selling point can be within years. This can be holding stocks for an extended period of time – depending on the stocks; it can be held from 1 to 30 years.
The main difference between long-term trading and short-term trading is that short-term trading gives profit in a short period while long-term trading shows steady growth over a long period of time. This tends to make Long-term less risky and more stable than short term.
• It is less stressful and time-saving.
• You can save taxes.
• It is compounding and less risky than short-term trading.
• You won’t have control of your money because of the extended period of time it takes for stocks to mature.
• It requires patience. If you want to make quick money, this is not or you.
• It requires profound in-depth knowledge.
• It would take time to see any profits.
Now we have looked at the time frame of stock investing, we are going to focus on the Short-term trading.
Using the Short-Term Trading Strategy to Make Money in the Stock Market
Before we go forward in this tutorial, it is critical you know the Risk Disclaimer:
Although Short-Term trading is one of the fastest ways to make money, it is also very risky. It is essential to understand that stocks, futures, and trading options are subjected to market risks and is not suitable to investors.
All trading is at your own risks, and if the market moves against you, you are responsible for all the risks and financial resources you use and for choosing this trading system.
None of the things published in this article recommends or constitutes any security investment or strategic investment, and none is suitable or any specific person.
Now we have cleared that, let’s look at the types of short-term trading:
1. Penny Stock Trading
This is the process, where you buy High-risked with a small market capitalization for a relatively low share price outside the major market exchanges. Penny stocks can also be called micro-cap stocks and are looked in terms o the various prices.
Most of the times, the definition varies, but generally, they are stocks with a market cap of $50 to $300 million and any stock less than $5 per share is a penny stock (some refer to it as $3 or below $1).
Most of the stocks are not traded on the regular stock exchanges like the New York stock. They are sold over-the-counter markets through the use of “pink sheets.” Companies that have less than $4 million and do not own tangible assets are likely to sell penny stocks.
This type of trading is risky because they are issued mainly by new/start-up companies with little record.
How it Works
Trading in penny stock is much more complicated. With little information about the company, you are trading on the risks are high, let’s say a stock is at 10 cents and it rises by 5 cents, you will have made return of 50%.
With this, $1,000 investment can buy up to 10,000 shares. If the stock being at 10 cents goes down to 5 cents, you lose half of its value. Example of this can be seen in the case of Tim Grittani where he bought shares of a company “Amwest Imaging.”
Investing $3,000 into the company, he sold his stakes within 10 minutes and gained up to 70% of the money making it $2,000. Since then, he was able to turn $1,500 to a million dollars.
2. Day Trading
This is a type o trading where stocks and securities are bought and traded within the same trading day. Or in other words, day trading is trading within one day. Most of the times, day traders buy stocks and sell in minutes or even seconds.
They utilize a considerable amount of knowledge-based leverage and short-term trading strategies to capitalize on small price movements and liquid stocks. In other words, their decision on whether to buy or sell a stock depends on 3 things – liquidity, volatility, and trading volume.
How it Works
Day Trading is different from penny stock trading in different ways.
First of all, day trading is made under the New York Exchange market while penny stock is traded over-the-counter bulletin board or pink sheets.
The SEC regulates day trading and penny stock trading while the later is under the FINRA rule which says that a trader who executes more than 4 trades in 5 trading days have to have at least a minimum of $25,000 in his margin account while the former requires a minimum of $500.
Coming to the risks, day trading puts up risks that are a relatively bigger initial investment while the latter involves risks that once you make, it can make you or break you.
Finally, on the rewards part, day trading rewards can be determined on the trading style while penny stock trading rewards are very high making it the type of trading most trades decides to go with.
3. Monthly Basis Trading
Monthly Basis Trading can also be called “Swing Trading.” This can be described as a kind of fundamental trading in which funds are held more than a day and up to weeks or even a month.
In reality, this type of trading sits between day trading (short-term) and trend trading (long-term). This type of trading involves the use of technical analysis to look for stocks with short-term price momentum.
How it Works
The goal is to capture a larger price move than possible in intra-day basis.
The stocks mostly advisable to use this type of trading is the large market stocks which have large market caps and are comprised of major companies. Also ironically, large trading institutions can’t practice this type of trading because they are too big to move in and out of stocks giving individual traders advantage to exploit this way.
One of the main differences between the day trading and this trading is the holding position time.
This trading holds at least an overnight position while day trading closes out before the market closes. In other words, Day Trading – single day only and Swing Trading – at least an overnight.
Swing traders usually make use of large time frame charts from the 15 minutes to the weekly or even monthly charts.
Time to Make Money Online with Stocks – Learn How to Get Started
What you need:
- Phone number
- Start-off capital
Looking at the forms or types of short-term trading, by now you have decided on the kind of trading you would go with. Most of you will ask me, “okay I have decided to go with the day trading, how do I start for beginners?”
Well, fasten your horses, we are going to dive in deep on the steps you can take to investing in stocks.
1. Signing Up with a Broker
Signing up in trading platforms is the first step to start making money off stocks. There are a lot of brokers out there online, but the best part is about finding a trusted and reliable platform. So far, the two platforms I can recommend is Plus500 and eToro.
To sign up:
- Visit www.plus500.com or www.etoro.com
- Click on sign up
- Insert your details and sign up
- Confirm your email
2. Depositing Money in Your Account
Before you can start trading, you have to deposit money in your online wallet. There are ways you can do this. You can sign in and click on funds, then click on deposit funds. You can deposit money in Plus500 and Etoro in the following ways:
- Through wire transfer
- Credit or debit cards
3. How to Start Trading
There are 2 skills of analysis you should advance to start trading:
1. Fundamental Analysis
This is the type of trading skills that require you to study the underlying forces of the economy, that can be used to provide future prices and market development. It can be the analysis of the economy as a whole or the individual company.
In other words, fundamental analysis is the study of the company and its history in the broader market and its sector, then compare this information with current news releases to determine the company’s stock and its future.
This is most suitable for long-term traders, but at most times it is combined with technical analysis to ensure a more accurate short-term trading especially monthly basis trading and penny stock trading.
Most of the factors used in this type of skill are:
- Political policies
- Media and news
- Consumer views
2. Technical Analysis
This is preferable and advisable than fundamental analysis. This is the determination of prices that seem right to buy or sell after all research is being conducted.
To predict a company’s stock price movement is the sole aim of this trading skill. While fundamental analysis makes use of the stated factors above, the technical analysis makes more use of charts.
There are many technics in this skill, one of which is the candlestick analysis used by a Japanese grain farmer.
Using Technical Indicators
Technical indicators show essential technical data in various ways. Such indicators help traders see changes in share price and trade volume, therefore giving him an opportunity to trade volumes. With some certain tools, you can be able to display helpful indicators within the chart or below it.
Example of this type of indicators is volume:
This is an on-balance volume chart, first of all, the indicator is used to measure the flow of positive and negative volume.
The indicator is running a total of up volume minus down. Up is how much volume that was there when the price went up, down is how much volume that was there when the price went down, each day volume is added or subtracted depending if prices change.
When the indicator is rising, it means buyers are willing to take part, when it is falling indicates lower price. In the indicator and price are both increasing, this means that the trend is still going up.
Platforms to help you in Technical Analysis
TradingView – this is a social trader’s network where anyone can publish a trading idea. This platform makes tools necessary for conducting the technical analysis. It allows you to draw on a chart, compare charts, and post your trading ideas or view others. This can go a great deal because you can interact with professional traders and learn new ways to trade.
MetaStock – this is an online stock analysis software that helps stock traders take more confident trading decisions by providing powerful tools and charting abilities for future trading. It comes with a 30-day free trial with access to real-time data and charts. This platform gives you the ability to code your indicators in charts and is willing to teach you how to code if you don’t know how to.
TimingCube – this is a platform or system that sends out stock trending signals on when to buy, sell or cash. This platform helps tell you when to get in and out of the market. This platform doesn’t tell you what to buy but gives you access to resources to help you preserve your assets and cash.
4. How to Withdraw the Profits
- Sign in your account
- Go to the dashboard
- Click on funds
- Select the withdrawal methods and click on submit
5. Joining Trading Masterminds
Trading mastermind is an organization of professional traders who come together to achieve the goal of creating success in trading and stock markets. It is crucial for you to know that joining this community would increase your chances of perfecting your trading skills. Like a wise man once said “two heads are better than one” then imagine what you can achieve as a community.
Recommended Trading Masterminds
Mastermind Traders – this is a trading mastermind community with various subsequential benefits. They help you master your trading skills, and with more than 25 years of professional trading, there is no doubt that you are alone in this part of money making. Once registered, you have access to your own account, free online trading courses and maximum benefits of a mastermind member.
Top Dog Trading – this is also a very good trading mastermind. Once registered, you can get access to be coached and be taught everything about trading. You are giving courses both in PDFs, and video tutorials and his videos are very easy to understand, talking from his student’s perspectives. It is really great, and you should try it out.
Making money in stocks is something that is very hard, takes a lot of practice and research. Giving it time is also one of the crucial factors. Teaching people ways to make passive income or income for retirement has always been my joy.
I feel the need that if people can make money in stocks, you too can make those 6 digits and retire while spending your days being thankful you took this decision.
I hope you enjoyed this tutorial, please like and comment and don’t forget, share with your friends. Remember, don’t stop researching. You can also find your trading formula that works.