They say that the words “Stocks” and “Free” don’t work together. That is not entirely true. While most of the things in this industry are not free, ideas are. And crazy ideas have turned out to be the most valuable.
In fact, it is people with the craziest of ideas that tend to make it in this field often times. Look at Thomas Rowe Price Jr. for instance; at a time that everyone was running away from investing in stock when depression hit in the 20’s, he on the other hand took to heels in the opposite direction. He made it big in less than 20 years.
The same applies to people like George Soros, Peter Lynch, John Templeton, and Benjamin Graham among other major pioneers who ventured into practices that were once considered anathemas.
A copycat world
With the coming of millennial technology, there are other celebrated and uncelebrated ideologues. Some have come up with fresh thoughts while others have simply built on the thoughts of the 80’s.
The problem with ideas these days is that you rarely know who has brought them forth; the internet and globalization has made it easy for people to copy one another. In fact, it doesn’t matter whether or not the world recognizes you as a pioneer in the stock market; as long as you are reaping big from a new strategy, that is okay.
In the same manner, it doesn’t matter whether you copied someone else’s idea or not; if you can find a way to use it to make yourself rich, you too become a hero. (Why else do you think they refer to the stock market as perfect competition?)
You have heard of social trading. It is allowing traders to follow strategies of people who are experienced in the stock and forex market. Therefore, copycats are some of the newest market investment techniques circulating in the stock market. See if you can take advantage of them, and if they take you far, at least keep whoever compiled these in your mind:
In the stocks lingo, scalping is the activity of taking advantage of the small fluctuations in values of shares to buy and resell them immediately before they fall. The rises usually occur immediately after a stock opens and may only last for one or two seconds before the prices flatten or drop. This is very risky for higher volumes of investment but highly rewarding at the same time. For lower investments, the margins are usually very low and thus unprofitable.
Traditionally, only a person in the trading floor could do scalping because they know precisely when a stock opens and can follow its short-term trend more accurately. With the emergence of faster and more robust computing systems however, other people have also started doing this online. Before you try it however, note that only about 5 percent of participants rip big from this, and most of them are experts.
Day trading is close to scalping except that it doesn’t put all focus on the entry point instability of an item. A day trader buys and sells a stock at any time before the day ends. The benefits of this method is that it shields the investor from the overnight risks.
You can call Exchange Trade Fund the middle choice between normal stock investment and traditional indices because it combines the “good characteristics” of both. It is basically an index that displays the characteristic of a normal stock, except that it also allows you to diversify.
As you know, managers of traditional indexes incorporate external assumptions in their calculations when determining where to invest in. In this system, the managers are expected to look for and bank on “legal secrets” to keep their companies ahead of others.
The ETF system on the other hand purely relies on the market trends of the past to predict the future. This has been partly influenced by the prevailing belief among the academia that no secrets really work in stock market; at any moment, it is the perceived value of a share that matters and not it’s hidden value. Therefore, how a share sold yesterday determines how it performs today.
Apart from its simple and direct calculations, ETF brings another card on the table: flexibility. While you have to wait for the day to end in order to open or close an index transaction, you can do these at any time with ETFs. You can carry out a full cycle of selling and buying within seconds.
This closely resembles ETF, except that investors focus around a theme. Basically, if you believe that a particular technological field is going to rip big in the future, you buy shares of the most promising firms in that area. The idea has been popularized by motif investors, who search for shares in the best firms within potential industries and sell them in clusters called “motifs”
For instance, many people currently predict that alternative energy will be the biggest thing in 50 or 60 years when crude oil starts to run out. As a theme investor, if you agree with this speculation, you can buy shares of the best solar or wind power companies and wait for them to ripen in the future. In the meantime, you will still be earning dividends.
Mobile stock market apps
The 2010 flash crash taught investors a lesson that computers are not to be fully trusted with stocks. But this has not stopped technology from gaining foot in the field. Modern investors not only use mobile apps for news feed but also share and acquire advice through them. In the future, it is expected that small devices will be widely used in executing buy/sell commands.
Meanwhile, you don’t have to sit before a PC to see how your stocks are performing. By downloading a stock market investing app on your android device, you can take a peek even while you’re away.
Tech stocks gift cards
Do you have a loved one who is interested in the forex market? Why not send them a gift of shares this season? New online brokers are offering you the chance to do that in a stylish way: tech stock cards. The cards can convert to cash and transfer just like normal shares. You might also open a gift shop with these!
While there are different ways people are investing in stocks, investors should be careful with some of the techniques and technologies though; because they are fresh grounds and might not be very welcoming to reckless stock investors. Unless you are sure about your decisions, just flow with the market.