Pre-Market Trading: Prep Techniques for Traders
My 37 Absolute BEST Stock Market Tips Trading Strategies
My 37 Absolute BEST Stock Market Tips Trading Strategies
If youre looking forsuccess in the stock market, you need a blueprint to follow. Thats why Im sharing my best stock market tips for traders.
Heres the thing: I didnt have a mentor when I started out in the stock market. It was just me and my computer. I figured it out as I went, turning $12,000 into more than $100,000 before I graduated high school. But it was far from easy and I made a TON of mistakes.**
You dont have to go it alone. Instead, you can take advice from someone whos been there and knows the ropes. Check out my 37 best stock market tips so you dont make the mistakes I did.
Tip 37: I trade small-cap stocks, better known as penny stocks
Tip 36: Penny stocks are ideal for the average trader
Tip 35: I am grateful for every single dollar that I make, including the losses
Tip 33: The stock market rewards knowledge and strategy
Tip 32: Losses arent bad if you can contain them and learn from them
Tip 30: I am never 100 percent certain about any stock
Tip 29: I will never try to catch the exact bottom or the exact top of any stock move
Tip 28: You dont have to be bullish all the time
Tip 23: Sometimes I like to dip-buy when support holds
Tip 22: I only look at the biggest percent gainers
Tip 20: Dont risk a big disaster when you can cut losses
Tip 18: Never feel uncomfortable in any trade or investment
Tip 16: My goal is to make between 20% and 50% within a few hours or days
Tip 15: Ive become a better trader and teacher over time
Tip 13: If youre going to set goals, be sure to make them count
Tip 11: Never follow anyone elses alerts not even mine
Tip 8: View this as creating a lifetime of wealth
Tip 5: Tools like StocksToTrade helps dramatically
Tip 4: I have many small losses and small gains, but they dont move the needle on my overall account growth
Tip 3: No one trade will make you rich enough to never have to trade again
Tip 2: Your approach to trading will dictate your success
Tip 1: Look for a mentor/group of successful traders who can speed up your education
Learn How to Invest in the Stock Market with Little Money
Know the Importance of Gathering Value and Practical Knowledge
Master Your Skills With the Trading Challenge
Keep in mind that thesestock market tipscome from my own experience. Theyre what Ive learned over more than two decades of trading, and they come from my deep desire to help others succeed.
Some of them incorporate my personal preferences. You might discover that you prefer trading in different ways. Thats okay. Try my tips, decide if they work for you, and keep pressing forward in your journey to stock market success.
Small capsare extremely small stocks that have very low market capitalization. In other words, theyre not worth billions of dollars, and they dont have high liquidity.
When youre a new trader, you dont have hundreds of thousands of dollars to play with. At least, I didnt. So I discoveredpenny stocks.Even if you have a small trading account, you can still profit.
In my opinion, penny stocks are ideal for the average trader. Theyre very volatile, which makes them good for small accounts.
At first, I started with $12,000 and my accounts werent growing at all. I was investing in big companies, and my account would go from $12,100 to $11,900. For several months, my account didnt do much.**
When I started gravitating toward lower-priced stocks, back in my first year, I went from $12,000 to over $100,000. You cant do that with big companies.**
If youre new to trading or if youre not having much luck, consider penny stocks also known as small-cap stocks. Theyre cheaper, more volatile, and far more exciting than traditional stocks. Plus, you can take income much faster, which will motivate you to trade more.
I dont want you to think that Im winning 100 percent of the time or that Ive never had losses.
Ive had big losses: $10,000, $50,000, $100,000. In fact, I actually lost $500,000 on one trade, but Im grateful for it all because it has made me the trader and the teacher that I am today.
And believe it or not, you need to have losses. You need to make mistakes. It makes you a whole person. Ideally, you can control the losses, though. Ill get into that more later.
For now, though, understand thatgratitude makes the trader. If you dont care about the money flowing into your account, or if youre not grateful for the luxuries that money affords you, whats the point of it all?
Dont go for home runs. Go for singles, okay? You can call meIchiroif youre a baseball fan. I have a lot of singles. My total profit gain is now $4.39 million.** However it took 3,796 trades to get there.
Just think about that for a little bit. A lot of people think that you have to make a million dollars in one trade that youre going to find the next Facebook. Trust me, youre not.
So, for me, I want totake singles because they offer better odds. If youre conservative and take your small gains as they come, you can build your wealth strategically and without huge risk.
Too many people are conditioned to rely on nine-to-five jobs with constant paychecks. The stock market doesnt reward the time that you put in it rewards knowledge and strategy.
Some of my most profitable trades only took a few hours.**
With trading, its all about you. And the more that you do in terms of studying and strategy and preparation, the better off youll be.
Some days, you dont even have to work. You dont have to call in sick. You dont have a boss. You dont have a cubicle. Its freedom. So think about that when you want that constant paycheck that pays so little.
Make your goal toget the most profit from the least amount of work possible. In other words, focus on making every trade count so youre not working the nine-to-five grind for the rest of your working life.
Losses are an essential part of your education. As I said, I dont win 100% of the time. If you actually look at my trades over the past nearly two decades now, Im winning roughly 74 percent of the time.**
Thats not bad about double the percentage of those analysts on CNBC. But still, Im not winning 100% of the time. I have to be prepared for the eventuality of being wrong.
Were all human. Nobodys perfect. Its okay. But part of what I teach, and part of the essential education that I provide, is how to react to losses. Contain them, manage them, and use them to get better over time.
Many traders want to dive in without doing research. They simply make a best guess so they can start trading. They just want in on the action.
As a result, they dont come up with a reliable strategy, so theyre trading like snipers, picking off stocks one by one and losing.
I dont want action. I dont want to play guessing games. If theres a stock and I dont know the industry, or I dont know whats going to happen, I dont trade it. The problem is that most people try to conquer everything with Wall Street. They think that they know every industry and every stock, and that theyre smarter than everyone.
If you look at every trade like a business transaction, the game becomes clearer.To boost your odds of winning, get as much information as possible.
This is not about illegal inside information. I use my experience and my knowledge so that I trade predictable patterns that I have always focused on for more than 20 years now.
Every single trade is new and different. But the patterns dont change much because human nature doesnt change.
If you can learn the basic patterns, it wont always going to be exact, not the exact same stock prices or the exact same days or patterns, but for the vast majority of the time, its pretty much the same. Andthats where my profits come from.
I cant be 100 percent certain, but I can fall back on my knowledge and understanding of the stock market to win more than I lose.
Stock prices are unpredictable, especially with pennystocking thats why I never stay in a play long enough to catch the bottom or top of the move.
In fact, I usually only profit from roughly one-third to one-half of the move, selling too quick or selling too late.* Perfect timing is a myth. Focus on growing your overall net worth not perfection.
I know this is tough for a lot of people because they say, Hey, but youve made millions. Your students are making millions from a few thousand dollars**. There has to be something that youre doing, like catching the stock perfectly.
No were learning to take the meat of the move.
I know its tough to believe, but very rarely will you ever see me catch the exact bottom or the exact top on a trade. All Im trying to do isuse every single trade to grow my overall net worth.Slow and steady wins the race.
It doesnt matter if the market is up or down; I find opportunities in all markets.
This is probably one of the best things about my strategy. I know the money is nice; the freedom is nice; the geographical freedom is nice. But also,Im not only making money in bull markets, like most people do.
I make money in bull markets, too. But Im not biased like the vast majority of people are. And that gives me a huge advantage, especially over time.
Because, over the course of your life, youll see the markets go up and down a lot. I dont want you to have to take one or two or three or sometimes even five or 10 years off of trading if we have a great depression where theres no opportunities.
If we have another great depression, most people will be out of work. Most people will be depressed
I, on the other hand and my students will be trading the same old opportunities that pop up in every bear market. Its kind of cool. I hope that theres no great depression, and I dont think that there will be. But if there was, my strategy is fine. Thats the coolest thing here.
If you learn how to buy, sell, and short stocks, youll probably be fine. They help you potentially profit in any environment because it doesnt matter which direction the stock moves.
My top students and I are often wrong, but we cut losses quickly. Wedo not let small mistakes turn into big disasters.
As I said, Im winning roughly 74 percent of the time**. So, 26 percent of the time, Im wrong.
But during that 26 percent of the time, my losses are much smaller than my gains. Even though Im winning more often than Im losing, my gains are also bigger than my losses.**
Its very difficult, given my discipline, to not make money over time. Because Im winning more of the time percentage-wise and Im winning more dollar-wise. If youre willing to cut losses instead of waiting for a rebound that might never occur, youll probably experience more success.
One of my haters actually sent me an email one time to say, You know what? You only trade the easy patterns. Let me know when you want to be a man and you trade the difficult patterns.
I just responded, LOL, because, yeah, I trade gimme patterns. Thats not a bad thing.
This isnt like Olympic diving here, where there are judges who are going to rank me based on the degree of difficulty. I trade easy setups. They make less money than most people on Wall Street.
Ill go into more detail in a minute, but for now, just know thattheres nothing wrong with trading easy setups. In fact, its the smart play because youre mitigating risk.
Breakouts are just one example of the gimme patterns I described above. A breakout happens when a stock shoots above resistance. It happens all the time, but you need excellent technical analysis skills or great software to predict them.
My software, StocksToTrade, has helped many people spot breakouts and benefit from them. Youre looking for a very specific pattern that have huge potential. A stock might waffle between support and resistance for a while, then suddenly break through. Thats when nice profits can happen.
This is the exact opposite of buying breakouts. When you short breakouts, youre betting that a stock is going to fall through support.
Since Im taking a short position, I can profit off a stocks falling price. This often happens after a specific catalyst or when theres too much volatility. Using software like StocksToTrade can help you spot potential breakdowns so you can short them for profit.
The risk in dip-buying is that support can crack. Lets say a stock is bouncing right around support, but the support is holding for an extended period of time. It might bounce a little higher each time, but it doesnt look like itll crack support.
I might buy to catch the bounce in this situation. I can make a neat little profit for my trading account, and its not as risky.
Just be aware that support can crack at any moment.If you buy at the wrong time and the stock falls below support, exit your position immediately to avoid further losses.
If you dont have a plan before you get in if you think, Oh, Im just going to buy this stock. It looks like it bounces every time youre asking for trouble.
What you have to say is, This stock might crack through support. And if it does, you need a plan. But if you have a plan, its not that scary. Sometimes Im wrong, and I cut losses quickly. Its not the end of the world.
I want to know thehottest stocksin the market right now. Also, if their news is based on solid earnings or a contract or a partnership with a big company, then its a potential buy as long as that news is what caused the big percent gain.
If the big percent gain is caused by a paid promotion or media mention, its a potential short. Because that kind of a catalyst does not last.
As I talked about inmy book, An American Hedge Fund, the insiders are only looking to pump up the stocks for so long so that they can get out. Once they get out, theres no more promotion and the stocks crash.
Definitely watch the movie Boiler Room if you havent seen it. Sometimes a company will have 50 different promoters sending out email blasts promoting it. If that happens, its still a potential short, because those are very temporary catalysts, as opposed to good earnings or a contract with a big company.
As Leonardo De Vinci said, Simplicity is the ultimate sophistication.
A lot of people will look down on my strategy. They look down on penny stocks. I dont care what you look down on or look up to. I just want to make money, andkeeping patterns simple, keeping news simple, and keeping catalysts simple works the best for me.
I know that theres a whole bunch of advanced indicators with RSI and Bollinger Bands, andFibonacci retracements. None of that stuff has been very reliable for me. Ive tried it all, but I only teach you the things that have worked best for me, and Ive been experimenting for well over two decades now.
So my question to you is, do you want freedom or do you want prison?
I want freedom. I want to work on my laptop no matter where in the world I find myself and trade when theres something that looks good to me. I dont want to be chained to 10 monitors in an office on Wall Street, risking my blood pressure and heart health over a play that might lose me or my customers millions of dollars.
Again, I want freedom, not prison. And I definitely dont want stress.
I touched on this earlier, but I want to hit it again. My top stock market tips includecutting lossesand avoiding big disasters. Really, theyre one in the same.
Lets say, for example, you buy a stock at $10 per share, expecting it to bounce to $11 or $12 per share. Instead, it cracks support. You watch it fall: $9.87 per share, $9.76 per share, and so on.
You have two choices here. You could exit the trade and cut your losses or you could hold on to hope that it will bounce back and save your trade.
I opt for cutting losses every time. I might miss those occasions when the stock rallies, but Im potentially big disasters in the process.
Wait for the best setups. They can make you rich. This is so, so, so important.
A lot of people think, Okay, Im ready for this, Tim. I want to do this. Im ready right now. Lets trade every day. Im ready to go. Thats not necessarily going to make you the most money.
Having the right perspective will. Sometimes, taking a day off when theres no great trade is actually the best thing to do.Sometimes, the best trade is to not trade at all. Having no positions is an option. Its just not an option for people who are degenerate gamblers who want action all the time. Dont be that way.
One of the best stock market tips I can give you is to step away from the computer. Youll get to trade tomorrow or maybe the next day. Let it play out.
If a stock isnt doing what you want, just get out. I hear a lot of students and a lot of people say, Oh, Tim. I want to get into this but its scary. I dont know how much to risk. I dont want to lose any money.
Listen, many of my best students dont even trade right away. Theyre just learning. This is not something that youre supposed to hate. This is something that youre supposed to love because you have enough preparation.
And, as I mentioned before, youretrading reliable patterns.If youre trading something and youre uncomfortable, just get out.You can always get out. Thats the beauty of trading.
This is not like real estate investing where you buy a house, and youre just screwed if the market falls out beneath you. I know so many people in real estate who have lost tons of money because the market isnt liquid. If you dont like a house, theres nothing you can do. With trading stocks, because Im trading actively traded stocks, you can get in and out very quickly often within seconds.
There will be new trade opportunities around the corner. Every few days, sometimes every few weeks, and sometimes every day. But you have to be around to be able to capture it.
I never want you to go all in on any stock, and risk disaster and potentially not be there in the future for when there is a better opportunity. So part of my success is just being there. No matter where I am, no matter when I travel, Im always prepared and looking for my plays.
Thats not to say that Im a slave to my computer and I need to trade, but I check in every now and then and I recognize whats paying the bills to allow me to travel all over the world. So be very patient.There are always new opportunities.
And if you take an opportunity, make sure you have enough cushion for a big loss. If you run out of money, you cant trade next time a good opportunity rolls around. When I give students stock market tips, theyre always surprised to hear that I dont take big risks.
I know that this sounds crazy to people outside my niche since big companies only go up or down 20 percent or 50 percent over several years. But that is why my penny stock niche is better.**
There is much more volatility as long as youre prepared and you have rules. I never capture all of the move; I aim to take the meat of the move. So youll often see me make 5, 10, or 15 percent gains, which Im fine with.Its totally fine not to capture the whole move.
One of my best stock market tips is to give time a chance. You wont start out as a great trader.
You learn what works best, and you optimize your strategy accordingly. Its key to track how your strategies and various patterns perform.
The only reason that I know about buying breakouts and breakdowns so well is because Ive examined them and I see that they work best.
Were all different people, though, so we all dont trade the same way. I want you to tailor your trading to your personality and focus on what youre best at.
Some people only want to hold stocks for a few minutes. Some people want to hold stocks for a few hours or a few days.Theres no one right way to make a lot of money. Its all about you. The stock market and trading stocks can be tailored to your preferences.
Keep track of your trades the good, the bad, and perhaps most especially, the ugly. That is the key to making you a better trader.
Use a paper and pen. Use an Excel spreadsheet or useProfit.ly. Profit.ly is a website where you can post your trades and keep track of your trading record along with notes. But this is all about being very meticulous with what makes you money.
If you dont know whats worked for you in the past, how will you know to replicate it in the future?Worse, if you dont recognize and record your mistakes, what will stop you from repeating them?
Several years ago, I received a letter from President Obama. I went to the White House and met with members of his administration. I was being recognized as a young entrepreneur.
Being a real teacher was one of my goals from the get-go. There arent that many teachers in finance. There arent that many teachers online who truly care about their students and genuinely care about actually creating knowledge and transferring it to anybody.
It feels great to have accomplished one of my goals, and it was a big honor when I got recognized.
People always look at me funny when they ask for my best stock market tips because this is invariably one of them: Trade like youre retired.
Pretend like you dont need any money. Youre set for life, and youre just enjoying the world around you. If there isnt a good play, or if youre getting too emotional, take time off. Cool down, get your head on straight, and once again live to trade another day.
If you look at this like a nine-to-five job that requires your butt in a chair, youll burn out. And worse, youll make bad trades.
Some of these promoters want you to follow their trade alerts to the letter. They say, Heres when to get in, heres when to get out. Now go!
If youre one of my Trading Challenge students, or if you follow me on Profit.ly, you know when I buy, sell, and short stocks. Im not telling you to trade what I trade. Thats for informational and educational purposes.
Find your own trades. Remember the Biblical parable about teaching a man to fish? It applies here.
I want you to be self-sufficient. I dont want you to ever have to rely on me or anybody else.
My team and I are just training wheels in the beginning. Well help guide you. Well try to get you on the right path. Well give you a little push, knowing that all of my most successful students can trade completely on their own after a few years and thats a beautiful thing.
Typically, bull markets are typically easier for trading, while bear markets can be more challenging.
Stocks follow the market. Sure, there are exceptions. I know how to profit no matter what direction the market goes, and thats something I teach my students.
But, generally, during bull runs, its a good time to take advantage of the easier profits.
Youre going to get sick of me saying this because its one of my best stock market tips
If youre notshorting stocks, youre leaving serious green on the table.
Short sellingisnt much different from buying. Youre just betting the stock will go in the opposite direction.
I have students who study and trade eight to 12 hours a day. Some prefer one to two hours, and some only 30 minutes a day.
View this process as creating a lifetime of wealth. Not just a few hundred thousand dollars. Not even just a hundred thousand dollars. With stock trading and market knowledge, you have a short window before something distracts you. But dont wait until youre old and gray.
The sooner you have this knowledge, the sooner you can begin trading.
A lot of people tell me, Im busy this summer, or, I have a job, or I have school. Whatever the reason, it all means the same thing: I dont want it enough to get started. You can make a ton of excuses in life, but if you arent equipped with this knowledge now, as opposed to later, you miss out on every single opportunity thats happening now.
You can start learning about this stuff in six years. Thats fine. But youll miss out on all the opportunities for the next six years. And thats not fine.
I dont care what I have going on in life. I want to teach you right away. Because I recognize the urgency, and I hope that you do, too.Even if you can only commit to studying 30 minutes a day, it can still change your life.
I have students of all ages, but the point is that theyre getting started. They want to create that lifetime of wealth, regardless of their ultimate dreams.
As one of my top students, Tim G., says: Trade the ticker.
Companies and management like to lie. They like to hype up their stocks. Essentially, theyre cheerleaders for their own companies.
Once upon a time, I fell for it and I personally lost over $500,000. I learned the hard way. I dont want you to have to lose $500,000 to learn this lesson.**
So heed this important rule:Stick with stocks that are liquid and trade the actual stock.
FOMO (fear of missing out) is a traders worst nightmare
One of my best stock market tips for traders is to forget about FOMO.If you miss out, dont worry at all youll get it next time.
FOMO can and will lead to making poor decisions. It doesnt matter if you miss out on something!
There are so many opportunities that you dont have to worry about missing out on a single trade. Youll learn from every single one of them and be better prepared the next time.
You do not have to get into a stock right away, no matter what kind of pressure anyone puts on you. And Im one of the few who who tell you not to follow alerts or picks. I dont want you to.
This is my Terminator right now, where I look for the hottest stocks every day.
As I said, I look for the biggest percent gainers. And tools likeStocksToTradehelp dramatically.
StocksToTrade is my B.F.F.It helps me with scans, charts, levels one and two, breaking news, fundamentals, and pre-program strategies. And its only going to get better.
While I dont necessarily like algorithmic trading, and it doesnt really apply to penny stocks, we have started to use StocksToTrade to make it easier to do a lot of the heavy lifting. We use it to sort through thousands of stocks and pick out the five or 10 top ones to trade every single day.
I never aim to make a few cents a share on any stock trade. Thats what happens when the stock isnt living up to my expectations, so I get out for whatever reason.
Too many people aim for these small gains, thinking, Oh, if you make $50 here or $100 there, it adds up. Thats nice until you get blindsided by a trade that goes against you too fast. And it wipes out two weeks, two months, or even two years of profits. Thats called scalping.
Some people will say, Well, why dont you just put in a stop loss? That way, every time you get in a trade, you put in this automatic order and it protects you.
Well, because penny stocks are so volatile, stop losses dont protect you. The stock can just blow right through your stop loss, and youll still be in it. So the key is choosing better trades, not trading as much, and not setting yourself up for a possible disaster.
No single trade will make you so rich that you never have to trade again. However, one bad trade can wipe out your entire trading account.
Think about that for a second. You must always protect your risk, your downside, and your blindside.
You need to understand and optimize yourposition sizeso that youre comfortable. You cant risk losing too much.
I know too many traders who dont think about what could happen if theyre wrong and they get wiped out. And their spouse is angry. They lose their kids college fund.
The stock market is scary if you have no plan.
Its no different from driving. If youre driving 100 miles an hour in a 35-mile-an-hour zone and youre drunk, youre probably going to get into a car accident.
But if you follow the 35-mile-an-hour signs and you dont drink and drive, and you pay attention to the road signs, guess what, driving can be very fun. Especially with my Ferrari and Lamborghini.
But you have to respect the rules. When it comes to the stock market, many people dont know the rules. Thats why I say my job is basically like Im a glorified driving instructor. Im teaching you the rules. Im teaching you how to not wreck your account.
Until you have a consistent track record of wins, never trade large position sizes.
Do you have a business or a hobby? Even if you only trade a few hours per week, treat those few hours as a business not a hobby.
I know that, for a lot of people, thestock marketis a fun little hobby. Its no different than looking at baseball cards or fantasy sports, or something where youre not really going to make money, but its entertaining. You like the action.
Do not do that withstock trading. Do not do that with your investments.This can change your life if you treat it right.
Or it could just be another one of your hobbies. And thats not cool. This can truly transform your life if you take it seriously and treat it as a b