With the Dow Jones breaking record after record, it is easy to see why the stock market serves as a fast track to financial freedom for many traders. The good news is that you don’t have to be a Wall Street broker or MBA degree holder with extensive experience in the capital markets to enjoy the amazing windfall Wall Street can generate.
You just need to have the right strategy, the right tools, an eye for opportunity, and most importantly, the emotional build to know when to dive in and when to let go. Read below to see how you can invest in the stock market for quick profits.
Determine profit fast
Thanks to the large number of stocks and options that are traded on the stock market every day, even small traders can make quick profits. If you are interested in getting into the market for a quick paycheck, you must first define ‘quick profit’. Your definition defines your expectations, and your expectations determine how you respond to certain events when you play in the stock market for quick profits. You have to enter this game with a clear mindset.
You don’t have to be confused or ride a wild roller coaster that your investment might send you to crazy house. While many different people will define ‘quick profit’ differently, we can all agree that ‘quick profit’ means making money from stocks in the shortest possible time.
Note that this definition does not define quick gain as involving low risk. The truth is simple: if you want to make a lot of money and don’t have much time to make it, you have to take a lot of risks. As the classic Wall Street saying goes, the higher the risk, the higher the return. Quick profits are all about big returns.
Key driver of quick profits: Risk
As mentioned above, if you want quick profits, you have to make risky bets. You can’t get the return you’re looking for if you take low-risk bets like government securities. If you want to make quick and substantial profits, you have to take risks. The good news is that there are many levels of risk you can take. Keep reading below to see how you can choose between different levels of risk and manage the risk you take with the money you invest.
Different stock markets: big board, over the counter
Most people have heard of the NYSE or NASDAQ. However, this is only the most famous stock market. There are other, riskier markets such as the Pink Sheets and OTC:BB markets. This stock market focuses on risky markets for penny stocks. Don’t let the name fool you. If you want to make money quickly in a relatively short period of time, you should investigate penny stocks. They are very risky. Many rate it quite well but don’t have a sizable buyer market.
Sure, your stock has gone up in price, but no one wants to buy the whole lot you’re ready to unload. Also, these smaller stocks are less regulated than the equities listed on the big boards. However, if you want to invest very little and see your investment grow in price, penny stocks offer many opportunities. They also offer a lot of chills and thrills.
Emerging market risk
If you don’t want to play the local Big Board and you don’t want to mess around with penny stocks, you might want to try trading blue-chip stocks from emerging market economies like Turkey, Brazil, India, and other countries. . The big opportunity with emerging markets is that they often bounce when many investors from developed countries are about to buy index stocks.
By buying unindexed or more speculative emerging market stocks, you are taking a lot of risk. There is an information gap. Often, many of these emerging equity markets do not have transparent rules. However, a general uptick in the broader market could result in a big spike for lesser-known, but otherwise fundamentally healthy, emerging market stocks.
Quick profit strategy: trade with momentum
Want one of these? You can make enough money in the stock market.
If you want to play the Big Board but you want to take a lot of risk so you can earn some big profits, you can try trading on momentum. You need to choose stocks that have a wide daily range between daily lows and daily highs. Also, the stock should have a large daily volume. These two factors ensure that you can get in and out quickly. Track the stock for some time until some news comes out which pushes the price lower.
Enter a programmatic order with your online trading platform to buy the stock once it reaches a price lower than the current price. Once you’re in, watch for the momentum and be prepared to click the sell button at a moment’s notice. You ride the momentum of the stock. You don’t buy it to keep it forever.
Once you hit your appreciation target (measured in percentage points) or there is bad news, sell the stock. Alternatively, you can subscribe to a stock charting service and enter a programmatic order to sell the stock when it hits a certain resistance level.
Quick profit strategy: use the month to month profit window
While day trading and fast trading make quick profits, you may have to jump from stock to stock depending on the trend for that particular stock. Another approach is to stay in highly volatile stocks but trade them on a month-to-month window.
You buy at a very low point for the month and you watch the stock closely for the month. You can exit when the price spikes very high during the month or you leave the stock after a month has passed. This strategy prevents you from holding on to the stock too long.
The secret to quick profit: Don’t get emotional and don’t get attached
Regardless of which strategy you choose, the secret to making quick profits in the stock market is never to get emotional. Don’t be greedy when everyone is buying. Don’t be too scared when everyone else is dumping. In fact, to be greedy when everyone is afraid and to be afraid when everyone is greedy.
Finally, you have to make sure you don’t get too attached to your position. Don’t keep thinking that you just have to hold on to ‘recover’ all the money you lost. Learn to let go and focus on the plus side to recoup your investment. Otherwise, you may wait a long time, and your loss may become permanent.
It is possible to make quick profits with the stock market. People do it all the time. Even every day. The good news is that not all of these people work for big banks, investment banks, or hedge funds. Many ordinary small investors like you. The key to making quick profits is to have a healthy risk appetite and have the right strategy.