After 20 years of trading the stock market, I was recently introduced to a trading technique that works more often than not.
And you don't need a large trading account to use it! All you need is a mentor and an online broker.
Why do you need a mentor? Well, if you "go it alone" with this kind of trade, you will probably lose! That is, unless you have years of experience and an elaborate computer set-up that includes a stock scanner.
Momentum trading is a strategy where a professional trader, using a properly programmed stock scanner, recognizes an opportunity to make profits off the continuation of favorable existing trends in the market regarding a particular stock.
A momentum trader is one who believes that current increases in the price of a stock will be followed by even larger gains.
If the potential gains are large enough, it is referred to as a "momentum monster".
Obviously, when you start trading the stock market, your goal is to make as much money as possible.
Making money in the stock market would be easy if you could simply get "inside information" on a stock that is about to rise in price over a short period of time, buy it, wait for it to make its move and then sell it for a profit.
However, without a mentor this kind of trading can take years of experience, thousands of dollars and a great deal of luck.
Believe me, I know, I have been there! The solution to this is to use trusted strategies taught by a mentor who has taken those risks and turned them into income.
Your mentor should have a solid stock trading background that reflects what you are looking for in stock market trading.
For example, if a mentor has a background in trading volatile "penny stocks" and you lean toward a more moderate approach such as short-term "swing trading", then your relationship will probably not be fruitful.
Your mentor should also have a reputation of successful trading in your area of interest.
In addition, your mentor should offer a chat room where you and other traders can share ideas and experiences with each other.
Look for a chat room That offers trade alerts on stocks and options in real-time and are indexed in a daily log which makes the trades very easy to mirror.
This way you have the advantage of watching the stock picks, receiving the alerts, and then deciding whether or not to follow the trade.
The chat room should also include an audio option for the alerts which makes multitasking easier for members.
Ideally the room should include voice, screen sharing and a separate "coffee lounge" where members can discuss things like trading strategies and possible "momentum monsters".
Search for a chat room that has highly experienced moderators who oversee the room and assist members in finding winning trades.
All of these ingredients make for a comfortable, enjoyable and hopefully profitable experience for everyone in the room.