Strategies for Trading Stock Online

The strategies for trading stock online are countless but there are only a few that have consistently performed over and over again. The three main strategies for successful trading are buying at all-time highs, swing trading stocks online and trading support. If you take the time to master these three strategies, then you will be armed with the most effective trading approaches in online stock trading.

Up, Up, and Away
1. The best way to buy a stock is when its in a full-blown trend move--usually when it's making an all-time high. You only want to do this ideally when the stock has traded on an exchange for at least three months. The excitement of trading a new stock issue has usually subsided and the price action isn't quite so volatile. As the stock trades up above its old high is where you want to place your buy order and then ride it to higher highs. There is not overhead resistance of old buy points from old investors clinging on to old positions that could trigger a trend reversal and the stock is free to continue its trend upward.

One Step Back And Away We Go
2. Trading pullbacks is another effect strategy for trading stock online as it lets you "step into" a move that is underway. When a stock is trending in a given direction, it is inevitable that the price action will pullback momentarily before beginning its trend resumption. When it does step back you simply put yourself in the position to latch onto the stock by taking a position as it resumes its original move. The benefit is that the entry is low risk and if you use moving averages like the 10-day and 20-day Simple Moving Average it can help you time your entries better.

S/R
3. Support and Resistance line, or S & R lines, are common, easily spotted, and a reliable strategy for online stock trading. There are stock traders that do nothing but trade support and resistance points in the stock markets for high profit potential. To trade support or resistance points, you need to just wait for a stock's price action to touch upon a suspected S/R point and then react. The reaction you are waiting to see is a reversal back in the opposite direction it just came from. If the overall trend on the stock is up, you should just trade the support point as the stock is likely to follow the trend on the larger time frame and do the opposite when trading resistance. By staying in step with the larger trend when using any online stock trading strategy, you are more likely to be successful and potentially make larger gains.

Word of Advice
4. It's going to be better for you to learn these simple strategies for online stock trading than to go out and try some complicated system. The best methods are often the simplest even if they are boring. As a trader, you're first responsibility is to make money and avoid risk. By mastering these strategies slowly, cautiously, and one at a time you put yourself in the position to win big while avoiding unnecessary risk.