If you’re a Veteran Stock Investor, you’re a market participant with intermediate skills. Your experience ranges from a few investments per month to a few trades per week over a small number of years. A veteran may still trade in a cash account, or may effectively utilize margin, managing the risks entailed. Your general market knowledge has likely deepened over time. As a veteran, you’ve learned to dutifully conduct routine research for your trades and follow-up as needed. Seldom are the times of investing merely on a hunch, veterans instead opt to use fundamental or technical analysis and can usually explain (and quantify) their reasons for entering or exiting a trade. Veterans are better equipped to find answers and seek assistance when needed if a corporate action affects his or her portfolio. As a Veteran Stock Trader, you’re probably aware of short selling, though only a handful of veterans will use this strategy themselves.
Holding onto winners longer while cutting losses short is the veterans’ aim, but perhaps you fall short at times. You may still battle your emotions when managing your positions and they may obscure the reality of the risk-reward relationship. As a veteran, you’re better able to see the writing on the wall and may actively move to cash when experiencing market volatility instead of becoming a “deer in headlights.” Many veterans don’t fully grasp the pitfalls of day trading and may not understand the classification of pattern day trader or day trading rules.
As a Veteran Stock Investor, here’s what you need to learn next:
- How to create and manage advanced orders
- The basics of short selling and technical analysis if you are prepared to manage the risks these strategies may involve
Veteran Stock Investors can improve their skills by:
- Reviewing stock strategies geared to the veteran skill level
- Continuing to use TradeKing’s Stock Screener and S&P Stock Reports to find potential investment opportunities
- Beginning to develop personal methods for finding investments
- Considering different ways to manage stock holdings
- Anticipating and planning for all possible outcomes for your investments, not just the positive scenarios
- Engaging members of the Trader Network to work through your investing ideas
- Inquiring members of the Trader Network to explain their investing analysis
- Challenging members of the Trader Network with an alternative point of view
- Journaling your trades with Trade Notes to record your investing thought process
- Educating yourself in how to invest with other types of securities in addition to stock, like options, bonds, etc.
- When ready and after you understand the risks, selling 30-day covered calls on long-term stock holdings since the downside risk is similar to owning stock
- Attending or watching TradeKing’s free educational webinars, geared to the veteran skill level
Veteran Stock Investors should steer clear of the following:
- Do not sell stock short without fully understanding the potentially unlimited risk involved
- Resist the urge to buy penny stocks or other low-priced stocks on a “hot tip”
- Limit the role your emotions play in your investing strategy.