Traders love day trading stocks despite of the proven fact that almost 90% of investors lose in this job. For those who wish to be on the safe side and remain alert during all their investments, here are some tips that may help one to get out of the losing situation. These tried and tested tips will definitely be of great help for those who are contemplating on taking on the bulls and bears of the stock market.
This is actually an art form and obviously, everyone isn't aware of it. We are talking of selling short. Each trader always prays for the share to go up as most of the day traders buy the shares at lower prices and sell them at better prices. But selling short is a nice way to earn profit even when there is a downfall. All it needs is to reverse the process of buying and selling of stocks when a stock price goes down. On a short sell, a trader sells a stock when the price of the shares is higher even without any idea for how low it goes and buys them later when the share price actual falls.
This may sound amusing for the new stock traders though experienced stock traders' eyes. This technique is similar to selling the product that is borrowed and paid for later. The thing to be noticed is the interest of the stock cost because you are betting on the falling stock and if that gamble does not go your way, then it may turn to a loss.
It may be noted that short selling is a lot more risky than the normal trading. In a normal day trading, you buy the stocks and if it goes down you may lose all and that is moving from 100% to 0%. But, in case of short selling, first you invest in stocks and if it does not fall you may lose tremendous amount of profit resulting in loss more than 100%.
Hence, short selling is way too dangerous for inexperienced traders. For those who wish to play smart, another technique lies in investing in safer solid stocks. For those companies that are listed in Fortune 500 or those that are on tremendous growth, then