The trading strategies to beat the market every time

Despite the uncertainty nature of stock market today, there are plenty of easy trading strategies that can beat the market every time. Here, I will share with you my favorite strategies for trading in stocks that will allow you to enjoy the financial benefits stock can provide, at lower risk. Here we go.

First, check the liquidity of the stock. Liquidity is the possibility of your shares being easily converted into cash at any time. This is what dead stocks do not possess. For you to have successful trading, you should check the liquidity of the stock. You can do this by checking the volume of the trades for the past one week. This will suggest to you the value of the shares.

Second, do your research. Learning to do your research correctly will make you focus on the value of a stock rather than just the price. Spending some time doing your due diligence before buying and finding out what the company you are excited about investing in, is buying and or selling may help in your ability to monitor your investment. So take time to find out before you fund it, investigate before you invest it. Any step taken to research, gives you an edge in the capital market. Many people want to make money in the capital market, but they do not want to make research. Your return on investment lies on your ability to conduct good research.

Third, identify undervalue stocks and position in them. You can evaluate whether a stock is undervalued or overvalue by using these 3 ways.
• EPS strategy
• PE ratio
• Market capitalization strategy
If you are investing for long term, you can equally do a dividend research. Check for any stock that will give higher dividend year in year out, buy such but avoid any stock that shows otherwise. Also look out to buy from companies doing well in the hot sectors, look at them well and position in them taking into consideration by comparing their EPS and PE ration respectively.

Fourth, is to plan your trades. You should know your entry and exit point before buying at all. Many buy stock without knowing when to get in or how long to hold it or when to get out. Any time you buy stock without a concrete reason, be prepared to make loss and locked up in the prison of poverty. Also plan to write down every trade you make. Think carefully why you buy the company’s stock, write down the loss and profit and stick to it.

In summary, before making a trade at all, some few questions need to be answered. If you don’t have concrete answers to these questions before, don’t make attempt to trade at all, else you are heading to a loss.
• How much money are you going to invest and why?
• Do you know your profit target and risk tolerance?
• Why are you buying right now? If the share is going down, what is the reason behind it, are you buying at the right time?
• What is your time scale? Are you going for short, medium or long term and why?
• Why do you think the share price is going to go up? If you can’t think of a reason, why are you buying it?
If the above listed questions are correctly answered, then you are well positioned to make money in stock market.