Best way to trade Stocks

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Buying stocks is not rocket science per se, but you need to learn about it before making your investment. In addition, you will have to learn the lingo to understand it better. The whole process may seem confusing initially, but buying stocks can prove to be simple if you follow a particular guide around it. Learn more about the trading strategies to know the best way to trade stocks here.

What is Day Trading?

Day trading is making short-term trades in regular trading hours on a given day. It involves holding positions for less than a day to make profits in the financial markets. While some day traders are very active and make multiple trades every day, others enter and exit one position per day. Day trading can be pursued as a part-time hobby or a full-time career, it can also be lucrative, but the long-term success rate is low.

Know how much time to put into practice before starting the actual trading, the money you will need, and how to polish your skills with time.

Time Investment

Day trading will not make you rich quickly, and neither will it take years to get consistency. Instead, it will take approximately six months to a year to hone your skills and practice a strategy before you get comfortable with it and trust it enough to put in your capital. You should, by default, start off by first practicing your strategy on a trading simulator, a demo account, for the first few months before putting your money at risk. A simulator will help you hone your trading psychological skills like patience, discipline, and focus.

Day Trading Styles

Some traders are very active, catch small price movements with large position sizes, and are called scalpers. Scalpers often make dozens of trades in a day. Some day traders attempt to capture bigger price movements and let their gains continue, risking a price reversal. This type of trade lasts longer than a scalper’s trades but should have a clear close-out price. Day traders often use price charts to execute traders or rely on Level II trading data, giving greater insights into the level of trading interest. One can also focus on specific news events or statistical tendencies they research.

Capital Needed

Stocks are capital intensive. You will need more than $25,000 at the very least to trade in the U.S. as a pattern day treader. You can use up to 4:1 leverage on day trades. As a result, you can trade in stocks with relatively high volume and volatility than other markets.

Hardware and Software needed.

Day trading needs a computer and reliable, high-speed internet access. You might need more monitors to keep track of multiple trading charts. You will have to keep your mobile phone handy if you lose your internet connection. In addition, you will need a broker for market data and to carry out trades.


Do not fall for products or strategies promising to make you rich overnight. Instead, spend your time, money, and efforts on your knowledge. Read books to figure out the best way to trade stocks. Avoid investing in trade signals that charge you heftily. Invest in yourself, assess your mistakes, and keep learning.

What is Position Trading?

Position trading has the longest holding time. The profit is big, and so is the risk. Position traders are the ones who hold investments for the long term, months, or even years. They care less for short-term fluctuations unless they have the potential to impact the long-term outlook of their position or they are trend followers.

Most position traders do not engage in active trading and are surpassed by long-term buy-and-hold investors for the amount of time they hold their positions. They use a combination of technical analysis and fundamental analysis to make decisions and consider factors like market trends and historical patterns.

Good position traders know when to enter and exit and when to place a stop-loss order.

What Is Swing Trading?

Swing trading tries to capture short to medium-term gains in stock for a few days to several weeks. It relies on technical analysis to look for trading opportunities and, at times, may use fundamental analysis, price trends, and patterns.

Swing trading is holding a position for long or short for more than one trading session but not longer than several weeks or a couple of months. The time frame is generalized since some trades may last longer than a couple of months, but they may still be considered swing trades.

Swing trades can occur in a trading session, but it is rare and brought out by extremely volatile conditions. The goal here is to capture a chunk of a potential price move. Some traders go for volatile stocks that are prone to fluctuations and go for date stocks. Whatever they seek, the process is to identify where an asset’s price is likely to move next, enter a position, and capture profit if that move materializes.

Successful swing traders only look to capture expected price moves and move on to the next opportunity. Swing trading is active trading popular among traders looking for intermediate-term opportunities with the help of technical analysis.

Pros and Cons of Swing Trading

Swing traders largely assess trades on a risk/reward basis. They determine where to enter after analyzing the chart of an asset, where to place a stop loss, and then anticipate where to get out with a profit.

Pros Cons
Requires less time to trade than day trading. Maximizes short-term profit potential by capturing market swings in bulk.
Trade positions are prone to overnight and weekend market risk Unforeseen market reversals can lead to considerable losses
You can rely exclusively on technical analysis. Misses longer-term trends over short-term market moves

How Does Stock Scalping Work?

Scalping is assuming that most stocks will complete the first stage of a movement. But the movement beyond that is unclear. Following the initial stage, certain stocks do not advance while others do.

A discounter tries to make as many small profits as possible out of it. The strategy does not believe in letting the profits run or optimizing positive trading results by maximizing the size of winning trades. The aim here is to increase the number of winners and let go of the size of the wins.

Traders with a longer time frame often achieve positive results by winning half, or even less, of their trades, just that the wins are bigger than the losses. To be a successful stock scalper, you will need a much higher ratio of winning trades versus the losing ones while keeping the profits almost equal or a little bigger than losses.

What is Scalping?

Scalping specializes in making money from small price changes and making a fast profit by reselling. Scalping day trading is a strategy involving prioritizing high volumes off of small profits.

It requires a trader to have a strict exit strategy as one large loss can impact many small gains the trader worked to make. A live feed, a direct-access broker, the stamina to place numerous trades, and other essential tools are necessary for the strategy to be successful.

All in all, scalping

  • Specializes in cashing in on small price changes and reselling.
  • Requires strict exit strategy since one large loss can eliminate the numerous small gains one gained.
  • Requires a higher ratio of winning trades against the losing ones while keeping profits almost equal or bigger than losses.

Scalping is based on,

  • Lowered exposure limits risk: A short exposure to the market lessens the probability of a risk.
  • Smaller moves are easily obtained: Here, supply and demand have to be imbalanced to handle the bigger price changes.
  • Frequent smaller moves: A scalper can exploit many small movements, even during quiet markets.
  • Scalping can be your primary or supplementary trading style.

How to Choose the Right Stock ?

If you decide to start investing, then you will have to learn how to pick the right stock. You will have to check the cash on the company’s balance sheet and the debts it has, and also know what the analysts have to say about it, although not trust it entirely.

As a smart investor, you know what to do: Diversify your portfolio across multiple sectors.

These were the basics of choosing your stocks. But with the numerous stocks to choose from, how do you decide which one to buy? You cannot, for one, go through all the balance sheets to choose the companies with a favorable net debt position and improving net margins.

When to Book Profit?

Profit booking or profit-taking is when individuals or companies liquidate their holdings to cash out the stock market profits that they created. Profit has to be a part of for-profit books. If liquidation is carried out to avoid losses, it is not profit booking. Share market profit booking and stop-loss are not the same, though.

An investor must not delay booking profits:

Company-specific News

Positive news about the company creates a positive sentiment about the company in the market.

Sector-specific News

Positive news for an entire sector can increase the price and followed by a peak, and then the selloff, resulting in a temporary slump.

Economic Indicators

Economic indicators also play a critical role when profit booking. GDP data can very well compel the investors to sell shares at the price levels in the market.

When to Close All Your Positions?

Upon establishing a futures position, the first decision you have to make is when to close your position. To close a position, you can take the opposite position in the same futures contract you are holding.

Generally, traders close positions when,

  • Profit targets are met, and the trade is exited at a profit.
  • Stop levels are met, and the trade is exited at a loss.
  • Trade has to be exited to satisfy margin requirements.

How to Choose the Right

Apart from the fees, platform features and security are the basic and critical things to consider when choosing a platform.
To make profits, an investor needs to use a brokerage service that caters to your investing goals, educational needs, and learning style. No one can guarantee investment returns, but you can select an online brokerage that suits your needs the best to set yourself for success.

Identify your needs

Find out what is most important to you in a trading platform. The answer will differ depending on your investment goals and where you stand in the investment learning curve.
Know if you are an active or passive investor, the kind of trades you want to execute, the help you will require, and your investing goals.

Zero in on the field

Narrow down on your needs, while certain brokerage features are more important for some investors than others. There are some features, though, that every reputable online brokerage should have. Starting off with basic necessities will help you narrow down the field.

Assess the Fees

Know how much you will pay to use a brokerage. While for some, a small premium will do given the platform offers features that the cheaper alternatives of the platform do not have. You do not want to lose so much of your investment returns to accounting fees and trading commissions.

Test out the platform

Brokerages usually have a description of the tools and resources their trading platform offers, but it is best to test it out first.

The education it offers

Apart from its usefulness and its usability, the brokerage should also offer educational offerings.

Depositing and Withdrawing Funds

Know how easily you can move the money in and out of your brokerage account. Review the deposit, withdrawal, and fund settlement terms of the brokerage you are thinking of investing in.
Check if the brokerage offers the option of a debit or ATM card attached to your account.

Customer Service

Check out the Help section of the platform that you are considering. Ensure that you can get in touch with the service staff quickly and easily. Also, look at the tech support team and see if you can contact them easily. It is important you understand how to get help when you need it.

About us

  • Blockchain Tradein is a renowned platform with expert wealth managers, serving 112 million users, 90 million active managements, 80 million being invested, and 15 monthly withdrawals. Everyone deserves to make successful investments. We provide constant support, and our dedicated guidance team is at your disposal 24/7.
  • Our dedicated wealth managers handle investments on your behalf and keep your portfolio updated with the market and keep you updated with the developments. We follow a dignified approach towards every portfolio where everything is carried out with transparency. We aim to provide you with secure and straightforward wealth management.

Why Choose Us ?

Choosing BTI will unlock,

  • Ultra-competitive spreads in the industry with low commissions.
  • The best possible execution: tier one liquidity that gives higher fill rates, decreased premature stop-outs, and essential price improvements.
  • Integrated Trade Signals, news feeds, exceptional risk-management features.
  • Expert aid for beginners.
  • Round-the-clock expert service.

Frequently Asked Questions

Investing comes at a cost. As you invest, there are certain risks involved in the form of fees to commissions, and these due add up. Consider investing with a company that doesn’t charge commissions or fees for stock and ETF trading. This structure is being adopted by more businesses, particularly small businesses and those new to the game, to attract and retain clients. In addition, some of these companies will waive the minimum deposit requirement, allowing you to start with a modest amount at no extra charge. However, you should review their cost structure for other investment vehicles and any additional fees they may charge for verifying if everything is in order.

The quantity of money required to start day trading is determined by the securities you wish to purchase.Stocks are most commonly traded in round lots, which are orders of at least 100 shares. You’ll need $6,000 in your account to acquire a $60 per share stock. You might be able to borrow half of that amount from a broker, but you’ll still have to come up with the other $3,000 on your own.You might be able to save money by using automatic investing systems. Robo-advisors are a new trend in the industry that might be beneficial to small investors because of their low fees. You’ll have the extra money in your pocket due to this. In addition, because they’re automated, they can afford to do so since no one is physically maintaining customer accounts. Instead, Robo-advisors employ algorithms to keep track of your assets and relocate them based on your risk tolerance and investing objectives.

A trade is executed when an investor submits a buy or sell order and sends it to a broker. The broker then decides which market to send the order to. After the order gets sent to the market and gets fulfilled, it is considered executed.

Trades are not executed instantly. Since they go through a broker first, it affects the stock prices by the time the trade is executed. Brokers carry out the execution manually or electronically depending on the limits or conditions placed on the order by you.
The broker looks at the size and availability of the order to decide the best path to execute the trade. They have different motives when directing orders to specific places. Brokers are inclined to internalize an order to profit on the spread or send an order to a regional exchange or a third market maker and get payment for order flow. Following are some of the ways a broker can execute your trade,

  •  Order to the Floor
  • Order to Third Market Maker
  • Internalization
  • Electronic Communications
    Network (ECN)
  •  Order to OTC Market

A stock dividend is a dividend payment given in stock rather than cash to shareholders. The stock dividend has the advantage of paying shareholders without depleting the company’s cash reserves, despite the fact that it may diminish earnings per share.Stock distributions are usually paid in fractions per existing share. If a company declares a 5% stock dividend, it must issue 0.05 shares per every 100 shares owned by existing
shareholders, for a total of five additional shares for every 100 shares retained.

If you utilize a regulated online stockbroker, you can feel safe when investing online. It is fundamentally dangerous to trade equities online. Start small, study investing books, and keep it simple by buying and holding for a longer period rather than attempting to time the market.

The four basic types of trading tactics are scalping, day trading, swing trading, and position trading. Different trading tactics are determined by the length and timeframe of the trade.

  • Scalping: It is the quickest and simplest trading approach. Scalp traders only give themselves a few seconds or minutes to make a profit. During the intraday session, they profit from modest price swings. They trade in large quantities and profit handsomely when the price fluctuates from cents to a few dollars. Until the end of the day, the procedure continues.
  • Day Trading: Unlike swing and
    position traders, day traders open and close their transactions on the same day,
    avoiding huge overnight swings. They either gain money or lose money on their trade
    at the end of the day.
  •  Swing Trading: They aim to
    benefit by maintaining a position for several days, if not weeks. Swing traders,
    unlike day traders, measure market sentiments as a whole before booking a profit.
  •  Position traders: They keep a position open for weeks, months, or even years before taking a profit. This is because, in comparison to the purchase price, the price of shares when sold is significantly high. Position traders often use weekly and monthly price charts, technical indicators, and fundamental analysis to discover appropriate entry and exit levels.

Day trading and gambling are pretty similar, to say the least. According to the dictionary definition, “the practice of putting money or other stakes in a game or bet.” So when you place a day trade, you’re betting that a stock’s random price swings will trend in your favor.

A simple strategy for beginners is the trend trading strategy, where the price of any asset, a currency, or stock, has three movement patterns- growth, decline, and sideways movement.

Unlock success, open your trading account with us and start trading today!

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