http://profitabletradingtips.com/profitable-trading-tips/stock-trading-tips Stock Trading Tips The air is full of year end stock trading tips. However, stock trading tips at any time of the year require both sound fundamental analysis and up to the minute technical analysis in order to turn a profit. Stock Trading Tips and Technical Analysis Day traders using technical analysis rely upon the fact that price action tends to repeat itself. Analysis solely based on technical factors is basically statistical prediction. Statistics does not predict which investor will buy which stock at which price but they do often predict that a certain percentage will buy or sell of certain types of stocks. This is the analysis of market sentiment. Here is an example of technical analysis that applies to stock trading tips. The market is very bullish on a stock. That usually means that those with money and interest have bought the stock already. With fewer buyers left over the odds begin to favor a downward movement of the stock with any flicker in the stock price. That is to say those who have made gains will often sell to take profits. The profit taking causes more profit taking and a substantial correction sets in caused by a fear-driven herd mentality. The smart day trader who is adept at technical analysis will short the stock and ride this correction down to a support zone, making profits along the way. Profitable day trading strategies also include the use of technical cues to determine when a stock has hit bottom at which time smart traders start to buy. Where do stock trading tips fall in this scheme of things? Think of stock trading tips as an alert service. Check out the tips and act upon them only if fundamental and technical analysis support the validity of the tip.

1. Stock Trading Tips

2. The air is full of year end stock trading tips.

3. However, stock trading tips at any time of
the year require both sound fundamental
analysis and up to the minute technical
analysis in order to turn a profit.

4. Stock Trading Tips
and Technical
Analysis

5. Day traders using technical analysis rely
upon the fact that price action tends to
repeat itself.

6. Analysis solely based on technical factors is
basically statistical prediction.

7. Statistics does not predict which investor
will buy which stock at which price but they
do often predict that a certain percentage
will buy or sell of certain types of stocks.

8. This is the analysis of market sentiment.

9. Here is an example of technical analysis
that applies to stock trading tips.

10. The market is very bullish on a stock.

11. That usually means that those with money
and interest have bought the stock already.

12. With fewer buyers left over the odds begin
to favor a downward movement of the stock
with any flicker in the stock price.

13. That is to say those who have made gains
will often sell to take profits.

14. The profit taking causes more profit taking
and a substantial correction sets in caused
by a fear-driven herd mentality.

15. The smart day trader who is adept at
technical analysis will short the stock and
ride this correction down to a support
zone, making profits along the way.

16. Profitable day trading strategies also
include the use of technical cues to
determine when a stock has hit bottom at
which time smart traders start to buy.

17. Where do stock trading tips fall in this
scheme of things?

18. Think of stock trading tips as an alert
service.

19. Check out the tips and act upon them only if
fundamental and technical analysis support
the validity of the tip.

20. Stock Trading Tips
and Fundamentals

21. Intrinsic value and margin of safety are
terms typically reserved for long term buy
and hold investors.

22. However, there are always stocks that are
grossly underpriced or overpriced.

23. The key to making a profit on these stocks
lies in seeing the future before the rest of
the market.

24. A contrarian approach to day trading can be
very profitable.

25. A trader understands the fundamentals and
sees that a stock is being driven higher than
its forward looking earnings support.

26. Or a stock has been driven down far below
what it margin of safety would dictate.

27. Knowing the basics about a stock is
essential to dealing with stock trading tips.

28. An apt example was when Xerox was
making a comeback in the early 80s.

29. The stock was underpriced.

30. The company was writing off losses from an
ill-conceived foray into the insurance
business.

31. These write offs hid the fact that the
company was otherwise making money
hand over fist.

32. Anyone who took the trouble to read the
financials of Xerox saw this.

33. At this time a group of raiders sought to
take over the company.

34. However, they ran out of money and got on
the wrong side of a bad trade.

35. They had to sell a substantial portion of
Xerox stock to cover losses when over
extended.

36. Xerox fell from $60 a share to $30 a share
in a day.

37. The stock trading tip of the day had been to
buy Xerox as the buyout effort would drive
the price up another $10 share.

38. This tip made no sense when the stock fell
by half, unless one understood the
combination of fundamentals and market
sentiment that drove the price down.

39. Smart traders jumped in at $30 and bought
the stock which opened the next day at $60
a share!