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Saturday, August 1, 2009

Quick Profits With Hot Stocks

By Hannah Page

The is a new game in the stockmarket these days called hot stocks. This goes against the traditional Wall St. Advice of buy low and sell high. The new hot stocks method is to buy high and sell even higher. The way it works is that you purchase stocks that are rising in value and sell them while they're still rising. The time between the buy and the sale is short.

The advantage of purchasing stocks this way is the short turn around time. Your money isn't tied up waiting for an undervalued stock to rise. The old method is still good, but adding hot stocks trading to your investment planning will help grow your money faster.

Hot stocks are excellent for day traders. If you watch the market trends closely you can choose from stocks that are on the rise. The biggest trick isn't to get greedy. Decide before buying the stock the maximum time you intend to hold it before selling. Whether or not the stock is still rising, sell according to your time table. Take your profits and get out.

When a stock stagnates or starts to go down, sell it immediately even if you loss on it. This way you minimize your loss. When you use a hit and run strategy, you will take some losses. The concept is to choose more winners than losers. You cover your losses and make a profit.

In many cases, you can sell the stock only hours after you bought it. To use this idea effectively, you've got to continually watch your stock prices and keep on top of the market's trends. Hot stocks are a high risk gamble that sometimes does not pay off. Learn from your losses and celebrate your gains. If you may a profit on two stocks and lose on one, you're still ahead of the game.

Don't put all of your money into hot stocks. This is just a way to make a profit in the stock market. Investors should have a portfolio with solid stocks from different areas of business to protect their investments. Don't neglect your long-term investments in favor of hot stocks. Some of your profits from hot stocks should be put into long tern investments.

The idea with hot stocks is to get in and get out. Even if the stock continues to go up after you sell, it is not money out of your pocket. Remember it may just have easily dropped and cost money. Buy, watch the price and sell when you have a respectable return on your investment. Don't be greedy.

Many backers employ a broker to buy and sell stocks. Hot stock investing isn't designed to be used with a broker. If you have got to pay a broker's fee for every exchange, hot stocks could cost more than you are making from them. Internet services for buying and selling stocks are better suited to this investment methodology. Look into ways to avoid brokerage fees if you intend to add hot stocks to your investments.

The stock market is a great way to grow your investments. Hot stocks is a method to make reasonable profits in a short amount of time. When investing your money always use more than one strategy and ensure that at least part of your money is in a safe, if low yield, financial instrument. Never gamble on the market with money you cannot afford to lose. Remember the old Wall St. Saying" sometimes you eat the bear, and sometimes the bear eats you." Good luck! - 23211

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