What is a “Good Stock Tip”?
Does this question seem like a no-brainer to you? Of course, it’s one that makes you a lot of money, right? But, does everyone make a lot of money with a good stock tip? The answer is, “Absolutely NOT!” In fact, I know people who have actually lost money on a good stock tip! How can this happen? This can happen because a stock tip is only as good as your ability to use it. What do I mean by this? You must have a plan! It is important that you have a personal trading strategy that you can plug the stock tip into. It does not matter if you are dealing in penny stocks or blue chips. You must have a plan. Of course your stock trading plan would be different for different types of stocks but the bottom line is do your own research, learn and develop your personal stock trading plan.
Here are a 10 important points to think about when developing your plan.
1) Which website will you use to trade?
2) When does the trading day begin?
3) When does the trading day end?
4) What time will you get up to be prepared and ready to trade?
5) How do you know when to buy?
6) How do you know when to sell?
7) What strategy will you use to pick your stocks?
8) What overall stock trading strategy will you follow? (Penny Stocks are different than Blue Chip Stocks)
9) Who will you trust to advise you?
10) Who has the best stock tips?
I could add fifty more points to this list but this list is a good start. You don’t want to just sign up for some stock trading tip and think you will make a lot of money. You need to have a plan in place. Making money in the stock market can be risky even for the most experienced stock traders. Go ahead and sign up for stock tips from a reputable source with a good track record but also develop a plan. Study, study, study and learn from those who are already successful.
Once you develop a plan test your plan. Start a paper account with a reputable stock trading website. You can do almost everything with a paper account that you would do with a regular account. The difference is that you are using play money instead of your own real money. This will allow you to make your mistakes without losing your money. You will be able to see how the market works in real-time. You will also be able to see if your plan is good or if you need to make some changes.