Tag: Strategy

All strategy related articles are found here. Educative, informative and written clearly.

  • Concentrated Stock Positions Are Risky

    Concentrated Stock Positions Are Risky

    Concentrated Stock Positions Are Risky
    The worst-case scenario of holding a concentrated stock position is that the chosen company can bankrupt and the stock value drops to zero.

    Concentrated stock positions occur when you as an investor own shares of one stock in a big percentage of your portfolio. So your capital is concentrated in a single position. How big is that percentage? It depends on the size of your portfolio and the volatility of the stock. But concentrated stock positions commonly occur when that stock represents 10% or more of your overall portfolio. 

    The modern theory says that it can be any position size that may hurt your investment plan. So, we won’t be wrong if we say that concentrated stock positions are any portion in one single stock in your portfolio that have a major influence on your overall portfolio no matter if it is 5% or 55%. Generally, it is a position size that can destroy your financial goals.

    But nothing is so bad as it looks at first glance. Many people created their wealth by holding a single stock. So many families built a fortune in this way. The value of that stock grew heavily over time and the members of such a family inherit these concentrated stock positions, a large one that consists of just one stock.

    Don’t matter how the concentrated stock positions are earned, they always represent an unbalanced allocation of investments. Since the holder of such a portfolio needs to reduce risk, it is essential to understand it and maintain it properly. There are several strategies very suitable for handling concentrated stock positions.

    Strategies for handling concentrated stock positions 

    Have you ever heard a saying: “Concentrated wealth makes people wealthy, but diversified wealth keeps them wealthy.” It’s kind of credo among investors. Concentrated stock positions are challenging for managing. They have great risk potential included. So for that to be done, the investor needs a proper strategy.

    One of the most common strategies is selling the part of these concentrated stock positions or the whole holding on it. To be honest, that is the simplest way to reduce the concentration on the stock. 

    But there are some that may occur, for example, the capital gains tax is connected with selling. In order to decrease the tax, you don’t need to sell the whole position. Sell it in the parts. For instance, you can define an amount and sell one by one quarterly. Of course, you can choose a different time frame but the goal will stay the same, to reduce the concentrated stock position since you would like to reduce the exposure also. Depending on the position’s value it may take a few years unless the whole process is done. Some experts claim that 3 to 5 years is the optimal time frame for that.

    So you have two choices with this strategy: to sell the stock immediately or in portions over time.

    Hedge the position – a strategy for handling concentrated stock positions

    Those are actually two strategies but we’ll put them in one because they are connected. This is a bit of a complicated strategy but an effective one. Everyone wants to protect the owned stock against drops. You can do it by using options. So, think about the buying of put options as a kind of insurance against the potential losses in your stock. When you buy a protective put option, you’ll have the right to sell your stock, the whole or part of it, at a predetermined price. Don’t be worried if the stock price increases above the predetermined price. Your option will expire worthlessly and you’ll still hold your stock.

    This strategy is quite good if you need short-term protection, so think twice are you willing to use it because over the long run this strategy may cost you a lot.

    Also, you may sell covered call options. The strike price should be above the current market price. That will give you an extra income but the smallest protection against total loss if the stock price decreases significantly. Moreover, you’ll not benefit from price appreciation if you use covered call options as a strategy to handle concentrated stock positions. 

    Maybe you can use covered call options as a part of a well-organized selling process based on the market movements. Meanwhile, you get paid the premium.

    Diversifying

    It doesn’t mean you’ll make some small adjustments to your portfolios. Your main goal is to reduce the volatility that a concentrated position generates. And you cannot do that randomly, this diversification has to be exact.

    As we said, you can sell this large position at once but there are some problems that may arise. The most important is that you can reduce the value of your overall portfolio by doing so. For example, if you sell the whole position at once that could cause the stock price to drop in value. 

    Sometimes such a decision can be emotionally difficult. So, a staged sale can be a way to avoid emotional reactions when selling a large position. You can do this if you determine the number of shares of the stock you want to sell by a particular date.

    For example, you want to sell 21,000 shares of the stock over the next 21 months. And you decide to sell shares every quarter. There will be seven sales during this period, right? At the end of each quarter, you are selling 3,000 shares. This will not disturb you a lot, you have a schedule, your emotions will be under control, you don’t even have to think about the market fluctuation.

    Use the exchange fund 

    This method is useful when you find other investors in the same situation with concentrated stock positions and who want to diversify as you do. What investors have to do? What are their options? They can join their shares into a partnership where each investor gets a proportional share of that exchange fund. Since the stocks are not the same, each shareholder will have a portfolio of different stocks. That will provide diversification. The additional advantage of this method is that it provides the deferral of taxes. 

    The straightforward approach to diversify the concentrated stock positions

    It is rebalancing with a completion fund. We describe it above. It is simply selling smaller parts of your position over time. You can use the money you got to buy some other asset and have a more diversified portfolio. That’s how a completion fund operates. But as a difference from exchange funds, you are in control of your stock.

    For example, you own $10 million worth stock, and you want to reduce the exposure to this stock. But you would rather sell part of your position because if you sell $10 million in one transaction the taxes you have to pay would be expensive. So, you prefer to sell  20% of the position every 6 months, and use that money to diversify into other assets. Over time you’ll have a fully diversified portfolio adjusted to your risk tolerance. 

    Bottom line

    Some wealth transfer strategies could benefit you. For example, family gifting strategies, and charity gifting strategies such as direct gifts, foundation, or trusts.

    The most important is to have peace of mind. Holding such a great but only one stock that generated money for many generations is a great responsibility. But that kind of portfolio is very volatile and risky. So you have to be smart and find the concentrated stock positions exit strategy suitable for your circumstances and goals. Your chosen strategy has to increase your overall wealth. 

    These strategies can reduce risks, reduce the tax of reducing the position. They are worth seeking. If you still are not sure which strategy to choose, find a professional financial advisor.

  • Trading Exit Strategy App – Where to Find It

    Trading Exit Strategy App – Where to Find It

    Trading Exit Strategy App
    Here’s a look at the best trading exit strategy app to avoid your losing trades

    Do we really have the trading exit strategy app? Only when you can assure yourself that you are not holding a wrong position you can be confident that you hold a good trade. Every single trade must have its own exit strategy, that takes into account both price rises and price drops. In other words, risk management. So you MUST plan your exit and you must have the best trading exit strategy that is possible.
    Well, how to create a good risk management system? How to choose a good exit strategy? How to determine it?
    That’s science. It is difficult and mostly depends on your feelings which is the riskiest part of every trade. 

    Identify when to take profit from trading

    Having an effective trading exit strategy app means to have the opportunity to identify when to make a profit from trading. Sometimes you will close your position too early and miss the bigger profits, other times you may lose if you stay too long on position. 

    When is the right time, how to know when to take a profit? 

    It is crucial, before entering the trading setups, every trader MUST have an exit strategy. It isn’t a matter of traders’ will, it is a matter of protecting from losing trades. 

    If you don’t have a trading exit, you’re trading without a strategy, you’re trading based on guesses or emotions. So, the chances of making a loss instead of profiting, are more likely. 

    What is the best trading strategy?

    Basically, a trading strategy is a plan of buying and selling in the stock markets. It is based on rules that have to provide successful trading and make a profit.

    When you are trading the stock market, you have to make a decision to buy or sell an asset, or to stay on the position. To be able to make a decision you’ll need information.

    Trading strategies MUST assist you to simplify the process of analyzing all information and making decisions. 

    The stock market works simply. It is like an auction house. It provides to both buyers and sellers to set prices and make trades. The stock market operates thanks to a system of exchanges but it is a zero-sum game. Meaning, some traders have to lose, so you would have a chance to make a profit. There is no other way. Any trade has only two ends: loss or profit.

    What is necessary to identify when to take profit from trading? 

    You should consider at least two exits: stop-loss and take-profit in your trading exit strategy.
    Stop-loss is the point where you exit the position when the trade isn’t going in your favor. Take-profit is the point where you exit the trade in profit.

    Getting out of losing trades

    Losing trades is a reality. They are coming together with winning trades. Yet you are never sure is your trade losing or winning one. This can discourage many traders and they may give up.
    But, wins and losses don’t need to come randomly. You don’t need to trade like that.
    Yes, the stock prices may go up and down and nobody knows exactly why the stock price makes changes. The stocks are volatile and their price may extremely and rapidly change.

    That’s the reason to have the best trading exit strategy app and keep the investment safe.

    Traders choose different strategies depending on the time frame of the trade and how long they want to keep the trade opened.
    Today, if you want to trade successfully, you will need to pay for hardware and software to use available strategies. But still, you have no guarantees and (this is more important) you don’t have any chance to check will your chosen strategy end with loss or in profit.

    Reasons for seeking the trading exit strategy app

    If traders have a good entry, it is more likely to reach the stop-loss or take-profit target faster. That will give you a chance to make another trade. And another, and so on.

    But, if you don’t have a good entry you will need time to see the result. That may hurt your profit. Of course, some winning trades will take a bit of time to develop.

    When you have a good entry you may increase the number of trades you want to take and you will have more advantages. To this point, everything sounds logical.  But how to avoid premature trading exits and losses? 

    For all traders, this should be the last warning! 

    When it comes to the exit strategy the things are not so clear to many people.  Having the best trading exit strategy (as much as it is possible) is important. Even more than planning for entry. Why? Your exit strategy shows how you have hedged your trade.

    Do you really know when and how to exit the trade?

    Most of the traders think that the entry point is the most important. Yes, it is important without doubts. But are you sure your trade will go in your direction? Do you have something to protect you from sudden price changes? That is the exit strategy. And if you don’t plan your trades you may end up with big losses. 

    If you didn’t think of an exit strategy, here is what you have to do.

    Set Trailing stop-loss

    A trailing stop-loss will help you to manage risk while optimizing possible peaks. By setting a trailing stop-loss you will secure your profits and accumulate more. Firstly, you must set levels for profit and loss. You will do that in a percentage, for example, 1.75% stop-loss and 3% take profit levels. What will the trailing stop loss do for your trade?

    It will close your trade when it has created the set peak and the trend begins to reverse. 

    A trailing stop order means to set a limit on the maximum potential loss but without setting a limit on the maximum potential profit. We can identify “buy” and “sell” trailing stop orders.

    Use time-based exit strategy

    This exit strategy is when you appoint the maximum time you want to spend on a trade. This is a good strategy because if your trade isn’t successful after a given time, the smart choice is to exit the trade. Well, how much time you will give a trade is up to you.

    Time-based exits are good when the trend is moving against you. It is a simple strategy that can help you control your losses.

    Stop-loss/take-profit strategy

    The truth is, there is no other way to get out of the trade than with loss or with profit. The last mentioned is better, right?
    One of the best exit strategies is applying stop-loss/take-profit.

    The goal of stop-loss is to keep you in a trade and limit losses while take-profit will secure profits by closing the trade when the profit target is reached. It isn’t easy to calculate adequate risk/reward ratios for stop-loss/take-profit orders. You’ll need time and effort to master it. 

    For example, how to identify the stop-loss position based on the money you are ready to risk at each trade? Stop-loss totally depends on the money invested. 

    Stop-loss and take-profit work almost in the same way but you have to define their levels differently. To make this more clear, the stop-loss will minimize the cost of the failed trade but the take-profit order will give you a chance to take the profit at the peak of the trade. You have to recognize the right moment to exit with profit.

    The market swings all the time. One positive trend can easily turn into a downturn in a second. You may think it is better to exit the trade with profit right now. Why risk potential earnings? Well, it isn’t a good option. If you don’t let your profit to grow enough and you exit the trade prematurely, you will lose a great part of potential gain. But, also, waiting for too long can be equally harmful.

    The drawback of stock trading apps

    Trading apps that you can find currently on the market are good for some things. They will give you a real-time market data or will help you to find new stocks. Yes, there are some apps for charting but still, you will need to write it down to Excel. Additionally, those apps can be costly and out of reach.

    The majority of stock trading apps you can find don’t give the variabilities in a meaningful way. Moreover, they don’t include one of the most important features for every single trade – examining and testing on where to set a stop-loss and take-profit level and when to exit the trade. 

    But, even if you decide to purchase them, will you have an opportunity to check the efficiency of your strategy? So, they are useless for the execution of your trades.

    You need an effective and accurate exit strategy app

    We were examining almost all apps, spent many years on research to find valuable tools or apps that would give traders a chance to check their exit strategies.
    We couldn’t find any. There was no such app.

    Until now.

    Here is Traders Paradise’s best trading exit strategy app.
    What our app is doing?

    Traders Paradise developed a trading exit strategy app, a unique tool for optimizing the exit strategy.

    This unique and easy-to-use trading exit strategy app will do all the hard work and complicated math operations for you and performs it all on its own. 

    All you have to do is to choose the stock you want to trade. We have a long list of the companies and you simply have to mark any by clicking on the name or to type the ticker name or the name of the company. But HERE you can find the full explanation.

  • What is Mutual Fund Investment?

    What is Mutual Fund Investment?

    What is Mutual Fund Investment?
    Can mutual funds give you better returns, are they safer investment choice, what are types of mutual funds? Read all here.

    By Guy Avtalyon

    A mutual fund is a company that puts together money from many people and invests it in stocks, bonds, or other assets. The investment portfolio of a mutual fund is a combination of stocks, bonds, and other assets. When an investor acquires shares of the fund becomes the owner of the part of these holdings.

    Mutual funds investment can give you a better return in a much safer way

    The performance of mutual funds depends mainly on the fund manager who manages the fund on your behalf. Making the decision based on knowledge, picking a well-performing fund manager is utterly important to your success. For all of that, you should need some basic information on mutual fund investment.

    OK, you own the mutual funds comprising a collection of stocks and bonds. That is your upper hand.

    Why? First of all, it allows you to buy in with notably less money than it would take to purchase the same portfolio of stocks/bonds on your own. Second, you spread the risks out there among a group of investors if something goes wrong.

    How the mutual fund portfolio is structured

    It isn’t one single stock or bond of one sector alone. Therefore you can reduce your risks of losing your money to a greater extent. Always keep in mind that you may be the worst loser in the stock market due to a periodical deep cut in share prices. True is, there is no full-proof method or strategy that is completely safe and without risks. That’s the fact. But, mutual funds have lower risks than many other investment options. This makes them suitable for novices, traders who lack proper knowledge and skills in the investment market.

    Mutual funds often have much better rates of return than the average savings account at the local bank.

    Besides that, you may have minimum risks in this type of investment compared to other more risky ventures.

    Even more, if you have some idea of which sectors are performing well, you are at an advantageous position of choosing a good sectoral fund. But be cautious, you should select a well-rated company. Diversification is the key to a healthy portfolio and mutual funds will help you get a diversified portfolio.

    This is one of the safest ways to invest your money in the long term if you are young enough and in no hurry for retirement because the most mutual funds do not have the high payoffs that many investors seek to include for their retirement planning.

    What are the main types of mutual funds?

    Essentially, there are three types of mutual funds with some variations on each:

    Money market mutual funds are an open-ended mutual fund. These types of funds invest in short-term debt securities. This is regarded as safe as bank deposits yet providing a higher yield. These funds are great for long-term investors. This slow and stable access to investing is better than leaving your money in an interest-paying savings account.

    Equity funds that may provide slow growth over time with some income along the way.

    Fixed income funds are created to provide a current income. This is great for those who have retired or for investors who are extremely conservative.

    Besides this, you need to have certain basic knowledge about diversifying your portfolio of rated mutual funds. That can give you an attractive return with the highest safety. In a roar bull market, investing in Diversified Equity Fund is the best option (60% of the total fund), then comes Balanced Fund (20%), followed by Midcap Fund (10%), Small-cap Fund (5%) and Liquid Fund (5%). If you’re a conservative trader, you may opt-in Debt Fund. But if you’re optimistic, you can go for index funds as a systematic investment plan. Index Fund can deliver you a very profitable return in a bull market. Why? Because index fund includes highly rated performing stocks with diversified sectors and reliable.

    One of the benefits of investing in a mutual fund is that offers professional investment management and potential diversification

    Ways to earn money by investing in a mutual fund:

    Dividend Payments. A fund earns income from dividends on stock or interest on bonds. The fund pays the shareholders almost all the income, lower for expenses.

    Capital Gains Distributions. The price of the securities in a fund may grow. By selling a security that has increased in price, the fund has a capital gain. At the end of the year, the fund shares the capital gains, lessen by any capital losses, to investors.

    Increased NAV. When the market value of a fund’s portfolio rises, the value of the fund and its shares increases also. If the NAV is higher the value of shareholders’ investments will be higher too. NAV is calculated by adding up the current value of all the stocks, bonds, and other securities, including cash, in its portfolio. Then, subtract the manager’s salary and other expenses, and then divide that result by the fund’s total number of shares.

    All funds carry some level of risk. It is possible to lose some or all of the money you invest. The reason is obvious, the mutual fund holds securities that can decrease in value. Dividends or interest payments are also changing along with changes in market conditions.

    A fund’s past performance is not important because past performance does not predict future returns. But past performance will never tell anything about the future performances but can tell you how volatile or stable a fund has been in the past. If you find a fund had more volatility, that is a sign that there are higher investment risks.

    Every mutual fund must file a prospectus and regular shareholder reports, that’s by the law. Read the prospectus and the shareholder reports before you invest. Also, the investment portfolios of mutual funds are managed by investment advisers. You should always check that the investment adviser is registered before investing.

  • Avoid Bad Investment Moves – Strategies that work

    Avoid Bad Investment Moves – Strategies that work

    2 min read

    Strategies to Avoid Bad Investment Moves

    It is possible to avoid many bad investments.

    If you know what “catches” to look out for and which clarifying questions to ask.

    Most bad investment scenarios can be avoided by following simple rules.

    First of all, you have to avoid emotional and personal investing mistakes, wisely avoid.

    Many investors, even the well learned, can confirm they made a rushed and impulsive decision and didn’t avoid a bad investment.

    Also, many have made decisions while high on emotions so as to score instant satisfaction.

    The danger of making bad investment choices cannot be overemphasized. You can use an extensive set of control strategies that people use to limit bad decisions.

    What are some of the bad investment choices you can make?

    * Failures of rationality – This represents the lack of possibility to see the bigger picture. The investor considers decisions in isolation and doesn’t include their impact on an entire portfolio.

    The consequence is that you can invest too much in a single asset class, industry, Or geographic market. Yes, because you know a lot about it and are comfortable with such decisions. 

    * Using a short-term decision horizon – when an investor is ignoring the appropriate goal of long-term wealth accumulation.

    The favor is short-term returns. 

    But you are here to stay. Right?

    The consequence is that losses are more likely in the short run. Much more than over longer time periods.

    People are twice as sensitive to losses as to gains. This behavioral phenomenon is known as “myopic loss aversion”. And their inclination to take short-term risks is too low.  So they often make the wrong investment decisions.
    Strategies to Avoid Bad Investment Moves 3
    * Buying high and selling low – means doing what’s comfortable amidst either bullish or bearish market conditions. The consequence is that when you are buying while markets are high or selling when markets are low is a risky strategy that fails to take advantage of market opportunities. A buy-and-hold strategy turns out to be superior.

    * Trading too frequently – this is the result of multiple emotional and personality-driven characteristic. That produces an irrational tendency toward action.

    The consequence is that investment costs are higher.  As the frequency of making the other types of poor decisions is increased.

    Strategies to Avoid Bad Investment Moves 4
    The experts recommend these seven self-control strategies. They can help counter your tendencies to make bad decisions and avoid a bad investment. The use of these strategies was not limited to investments and often included other behaviors and other important lifestyle decisions.

    Here are the seven strategies and their application to financial decisions:

    1. Limiting options – Purchase illiquid investments to avoid the urge to sell investments when the market is falling.
    3. Avoidance – Avoid information about how the market or portfolio is performing to stick to a long-term investment strategy.
    4. Rules – Use the rules to help make better financial decisions, such as only spending out of income and never out of capital.
    5. Deadlines – Set your own financial deadlines aiming to save a certain amount of money by the end of the year.
    6. Cooling off – Wait a few days after making a big financial decision, before executing it.
    7. Delegation – Delegate your financial decisions with others, allow your investment advisor to manage your portfolio.
    8. Other people – Use the help of other people to reach their financial goals. Make some appointment with your financial advisor to make and execute a financial plan. Certainly, you don’t want all your money in just one kind of investment. So you can safely choose a single advisor or firm to handle a range of investments.

    The stock market’s tendency to produce large gains and losses. So there is no shortage of faulty advice and irrational decisions. 

    As an investor, the best thing you can do to pad your portfolio for the long term is to implement a rational investment strategy. The one you are comfortable with and willing to stick to. 

    If you are looking to make a big win by betting with your money, try the casino.

    You should be proud of your investment decisions in the long run. In that way, your portfolio will reflect the solidity of your actions.

    You would this: Bargain Hunting – The Holy Grail of Investing

    Risk Disclosure (read carefully!)

  • Good And Bad Investment

    Good And Bad Investment

    2 min read


    When you work hard to earn money and you earned a surplus that you can invest, you want to make sure it isn’t going to disappear on you. Take your time to carefully understand an investment prior to putting your money into it. It is a very important concept. 

    Sometimes it’s better to miss out on a great investment than it is to be involved in a bad one.

    Of course, there are good and bad investments, but the question is how to tell if something is a good or bad investment.

    The act of accumulating and investing wealth is a dangerous proposition.

    The hardest part of the process isn’t picking the right investments, but rather, guarding our hearts from the greed of money.
    We need to always be aware of the desires and possibilities, especially when money is involved.

    While supposedly ”market-beating” brokers and advisors tend to profit in all market conditions. On the other side, we have the performance of the typical investor over the past 20 years. But we can precisely describe them as shockingly poor.

    There is a lot of confusion surrounding investments, but truth is that investment is anything that you can buy and hold on to in order to gain value.

    Literally, the investment can be anything you can buy and sell.

    The key is to realize there is no such thing as a naturally good or bad investment.

    What I mean is if you make right timing, you can be wrong about valuation and strategy, and still come out with a profit.
    Or if your valuation is strong, you can be wrong about timing and strategy and still come out with a profit. You may have a

    positive expectation with good risk management. In other words, your strategy is good.

    But your profit is assured over time even though any single investment can fail on timing and valuation.

    Successful investing is all in the process: risk management, strategy, and timing. It takes work and effort.

    There is no one-stop solution. There is no magic pill. If you’re looking for instant solution and asking what is a good investment, your thinking is in the wrong direction.


    Everything, but literally everything can be a bad or good investment, depending on the moment you enter, the strategy, the trading plan, investment plan.

    For someone who is trying to identify solid investment opportunities from among various available choices, it would be helpful if you are able to identify financial opportunities as distinctively good or bad.

    However, it’s not always a black-and-white task.

    Some of the processes depend on your own good perception. There are some red marks that forewarn of a potential losing bet. However, as well as some positive signs that could lead to a profitable investment.

    The average investor’s investments underperformed the returns of almost every asset class. Part of the reason for this is the tendency of investors to buy high and sell low.

    In times of market volatility, many investors panic and dump their stocks. They often make poor investment choices. They are seduced by the promise of high returns from investment products. That is difficult to understand and hampered with high fees.

    A good investment is one that meets your goals and objectives.

    A bad investment is one that doesn’t meet your goals and objectives.

    To find good investments you must have an understanding of what is realistic. What kind of return should you expect on an investment? If you have a good sense of what is and is not possible you are less likely to get scammed.

    You must be able to keep your eye on your chosen investment, and this is something that can be hard to do. Not all investments are easy to track in this way. The best thing to do is to make sure that your focus is primarily on material assets, as these are the kinds of things you can easily see, and they are more likely to be easily tracked too. As long as you can keep an eye on your investments, you can be sure that you are doing with it what you should be doing in order to make money.

    I presented you a few essential rules you can use to avoid bad investments and recognize good.

    Those are not must-follow rules. You can think of them more as guidelines. Especially if you’re a new investor, using these rules to stay away from bad investments can help you to make better choices.
    And never look for the big, fast wins. You’ll be crushed.

    Risk Disclosure (read carefully!)



  • Trading Stocks Platform – How To Find The Best

    Trading Stocks Platform – How To Find The Best

    2 min read

    (Updated October 2021)


    The best trading stocks platform must be available from the beginning of the signup process.

    Trading stocks platform is simply software for trading, it’s a kind of online broker. It is very important for any investor. And the most powerful tool in your hands. Every trader has it’s own investment style of trading. An abundance of brokers’ offers allows individuals to choose what best fits their needs.

    If you’re an active trader looking to try your hand at beating the markets, you probably have a good idea of what you want from a brokerage: low costs, premium research, innovative strategy tools, and a rich with features trading platform.

    trading stocks platform

    This era of trading stocks platform makes the world as high-risk/high-reward investing accessible to the wide public. Profitable investing takes time and hard work. It also requires you to use the best trading stocks platform that fits your investing goals, educational needs, and learning style.
    If you are new investors, selecting the best trading stocks platform can make the difference between a great new income stream and an inevitable frustrating handover.

    You have to know one thing, there’s no sure-fire way to guarantee investment returns. But there is a way to set yourself up for success by selecting the right trading stocks platform that best suits you. I’ll try to show you all the important things you should be looking for in your ideal brokerage on your path to find the best online broker.

    For a starter, take a moment to focus on what is most important to you in a trading platform, before you start clicking on brokerage ads. You’ll be surprised!

    Recognize your needs when choosing a trading stocks platform.

    You must know them.

    If you are a novice, you may prioritize things such as basic educational resources, large glossaries. Also, you might prefer easy access to support services. Maybe the ability to have practice trades before you start playing with real money is more important to you.

    For example, an experienced investor, possibly someone who executed hundreds of trades already but is looking for a new trading stocks platform. Such will prioritize advanced charting capabilities, conditional order options, or the ability to trade derivatives, mutual funds, commodities, and fixed-income securities, as well as stocks.
    Trading Stocks Platform - How To Find
    And you have to be honest with yourself about where you are right now in your investing tour and where you want to go. Do you want to try your hand at day-trading but don’t know where and how to start? Maybe you like the idea of tailoring your portfolio, or you want to pay a professional to provide it done right?

    For now, I suggest you start with this crucial deliberation as a way to determine which of the brokerage features would be the most important to you.

    To help yourself to find and use the best trading stocks platform be honest when you are answering these questions.

    a) How much do you already know?
    b) What kind of trades will you want to execute?
    c) Are you an active or passive investor?
    d) What kind of help do you need?
    e) Define your goals

    Be brutally honest with yourself about how much time, energy, and effort you are willing to put into your investments. Your answers may change over time, no one can anticipate all their needs and goals for the rest of their life. Just start with where you are right now.

    Pay attention to several things while finding the best trading stocks platform



    * Does the brokerage website offers two-factor authentication
    * Do they clearly explain how they use encryption or “cookies” to protect your account information and how they work?
    * Try searching the web for reviews of the brokerage, using keywords like “insurance claim”, “fraud protection”, “customer support”, “chargebacks”, “easy withdrawal”
    * Will the company reimburse you for losses resulting from fraud? etc.

    And then test it!

    Every brokerage should have a decent description of what kinds of tools and resources it is trading stocks platform offers. But sometimes the best way to evaluate platform quality is to give it a test drive. For brokers that allow you to open an free or demo account. It might be worth the effort to go through the signup process just to access and test the trading platform.