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Tips in Active Stock Trading

If you are a neophyte in investing on stock market, you might be wondering what to do on how you are going to start. The first and foremost is to understand the platform you are using. Being familiar with the platform is primary thing that a newbie should do.

Also be aware and consider the Macroeconomics. At this time of Global Crisis, that is brought by COVID-19, the market has become very volatile as compared to previous years. One wrong move and that might cost a lot of your investment.

What to do after I have familiarized my trading platform? What are things that I need to consider on Active Trading in this time of pandemic?

Here are 5 Tips on Active Stock Trading

  • Create a Trading Plan
Start first by Creating a Trading Plan
Before anything else, have a plan.
    • That means, knowing your entry points and exit points. Stick to it.

  • Favor investing in short term and remain extra vigilant on the stock price movement.
Be vigilant on volatile stock price movement
Be extra vigilant on the volatile stock price movements


    • There is more benefit in trading in short term now, rather than long term - this has something to do with the current market volatility. Short term investing is more nimble and can adapt quickly on any changes.

  • Trade in smaller quantities
Not all Small are less
Not all small are less


    • As we are more unsure than before it pays well to lessen the risks. Trading is risks in itself,and many are not able to accept more risk brought by the uncertainty due to Covid-19

  • Choosing your chips or stock
If you are a neophyte, start with at most 4 stocks.


    • Don't just go and buy the blue chips. Remember that you are now in short term active trading. It is preferable to enter into stocks that are active.

  • Check the Trade Prices of the stocks, traded volume and the prominent buyers
Table of Buyers and Sellers in a given trading period
Table of buyers and sellers in Stock Market


    • Knowing the traded price of stocks gives you an idea on what range of price the buyers and sellers agree on. This should give you a better idea if the stock price is going up tomorrow or going down.
    • The traded volume, gives you an idea about the: weight of the stock price, the price you should be wary about - because like you - all traders doesn't want to sell their stocks to price lower than they bought it. If you cannot understand it, you better learn it now.
    • Their are buyers that are known to be composed of good traders. (eg. JP Morgan ), when you see them buying a certain stocks that means they studied it and has a good chance to get a profit - but don't just follow them - do a research on your own and see if it fits your trading plan.

By the way, don't lose heart when you see your stock falling. Its not always your predictions and analysis is accurate, learn from it and if you don't give up, you will not only recover it but also gain. Consider losses as challenge to improve, a tuition fee - as some calls, it to learn in Stock Market investment and trading. Keep in mind, nobody learned to swim by reading the books, watching videos and or even watching from the sideline - all of those who learn got it by getting themselves wet. The same thing is true in Stock Market.

There are ways and technique to take back those losses, which I plan to share here in my next articles.

I suggest to enrich yourself and study more about the stock trading. Professional Traders are very acquainted to tools and index - which are a good indicators of a stock market trends. 

For newbies, it is good to mention and on study on this - DJIA (Dow Jones Industrial Average), RSI (relative strenght index), PSEI (Philippine Stock Index) if you are trading in the Philippines, Nifty 50 if you are trading in India, Moving average, MACD, Bollinger and many more. Explore all of it, one at a time.

Happy Trading.

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Location: Philippines

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