Trade Big

Submitted by George Polizogo... on 25 June, 2009 - 09:57

Another tip that you have to keep in mind when you trade big is to be extra conscious with price fluctuation. When you happen to see a rapid upward movement of a particular stock, do not aspire to go with the sudden surge.

Stock market traders are of two kinds; those who go for the small boards and those who trade big boards. What I mean for small boards are those listed stocks in mines and other natural resource exploration, while those in trade big boards are the industrial and commercial sectors. Natural resource explorations like mines, oil and gas are considered as small boards precisely because of the amount that they offer per share. Most mining and oil exploration shares are listed by cents. This precisely is the reason why they are called small boards' listings.

On the other hand those that are listed on the trade big boards are industrial and commercial shares whereby their cost per share can even go as high as 50 dollars per share or even higher. Industrial sector listings would include manufacturing concerns involve in food, shelter, clothing, transportation, electronics and computer and even heavy machinery productions. Commercial sector on the other hand would mean companies that are into trading like companies in the buy and sell and distribution of consumable and non-consumable items and service companies. Financial companies like banks and investment houses are also grouped in this category.

Most people believe that in buying stocks you have to give preference to stocks that are directly related to the production of food, shelter, education and other basic needs of today's consumers like electronic and communication products as well as transportation, medicine and transport. They would say that although most of these stocks are a bit pricey, you can depend on their ability to withstand volatility of the market because of the continuing need of the public for the goods that they produce. They would add that with these kinds of stocks you will not be subjected to the vagrancies of inflation as your shares would tend to go up with it. In short, they will advise you to trade big.

Indeed, if you are new to stock market trading, it would be advisable to go for dependable stocks. Do not bother with those mining shares that go for less than one cent per share. These stocks are attractive because you can have a bundle of shares for only 50 bucks. However, you have to be careful if you do decide to invest on mining shares. Your 50 dollars worth of shares can suddenly be worth 20 dollars if a sudden drop in gold, copper or mining will transpire. This is the nature of mining stocks. It is very volatile since gold as a mineral is affected in the pricing of currency such as the dollar. And a sudden drop in the price of gold will have repercussions to other minerals mined such as silver and copper. So, trade big to avoid these pitfalls.

Another tip that you have to keep in mind when you trade big is to be extra conscious with price fluctuation. When you happen to see a rapid upward movement of a particular stock, do not aspire to go with the sudden surge. There is a great possibility that the surge will suddenly cease and fall back lower that the previous level before its upward surge. Always try to open your ears and eyes to any breaking news that might have an impact on stocks and make your move if you sense something is on the offing. It is far better to be first in the bandwagon when it starts to move than to be the last when the bandwagon is already falling down headlong.

George Polizogopoulos is a staff writer for MyShareTrading.com, an information hub for share trading including forex trading, derivatives, options, warrants and CFD Trading.

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