What Is a Realistic Profit when Trading Stocks?

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What Is a Realistic Profit when Trading Stocks?

We trade stocks to make money, protect investments that we already have, and make our lives better in the future. This mindset is good to recall when trading in the trenches on a hectic trading day. The thought that comes to mind today is just what is a realistic profit when trading stocks? All too many traders have forgotten to set their trading stops and seen a promising trade reverse from profit to loss. All too often a trader intentionally does not set an upper “sell” stop as he wants to “let the trade run” to higher profits. To the extent that a person has results from sound fundamental and technical analysis that predict a huge rise in stock price, this may be a good strategy. However, just letting a trade run in hopes of gaining a larger profit is all too often a recipe for disaster. Always ask yourself what is a realistic profit when trading stocks in any give sector and on any given day. Market research can be useful at this point. It turns out that after a big market move prices tend to correct a bit backwards. This works on a multi-year time frame and on shorter time frames as well. The stock market is efficient in the long run and often inefficient in the short run. This is due to speculation of both investors and short term traders. When asking yourself what is a realistic profit when trading stocks, remember the tendency of the market to backtrack.

The Author’s Barron’s Effect

Years ago when Barron’s was only in print and not online, this author often purchased stocks mentioned in the publication. My theory was two-fold. First of all, when the magazine interviewed experts in the matter of picking stocks, they often recommended stocks that had a good growth potential. Second, everyone else read the publication and decided the same thing and went out to purchase the stock. This author profited several times by purchasing the publication on the weekend and placing stock orders at first light, so to speak, on Monday. The part about what is a realistic profit when trading stocks in this story is this. I set 30% as the gain to expect before selling the stock in question. I certainly missed out on further growth in a couple of these stocks but I also avoided huge losses in more than a couple. What happened to market sentiment with these stocks was that when they failed to pan out, investors bailed in huge numbers, driving the stock price down. And sometimes the initial advice was bad as well. But being mentioned in the famous publication tended, in the short term, to drive stocks prices up.

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What Is a Realistic Profit when Trading Stocks?

  1. 1. What Is a Realistic Profitwhen Trading Stocks? By www.profitabletradingtips.com
  2. 2. We trade stocks to make money, protect investments that we already have, and make our lives better in the future.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  3. 3. This mindset is good to recall when trading in the trenches on a hectic trading day.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  4. 4. The thought that comes to mind today is just what is a realistic profit when trading stocks?http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  5. 5. All too many traders have forgotten to set their trading stops and seen a promising trade reverse from profit to loss.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  6. 6. All too often a trader intentionally does not set an upper “sell” stop as he wants to “let the trade run” to higher profits.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  7. 7. To the extent that a person has results from sound fundamental and technical analysis that predict a huge rise in stock price,http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  8. 8. this may be a good strategy.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  9. 9. However, just letting a trade run in hopes of gaining a larger profit is all too often a recipe for disaster.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  10. 10. Always ask yourself what is a realistic profit when trading stocks in any give sector and on any given day.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  11. 11. Market research can be useful at this point.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  12. 12. It turns out that after a big market move prices tend to correct a bit backwards.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  13. 13. This works on a multi-year time frame and on shorter time frames as well.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  14. 14. The stock market is efficient in the long run and often inefficient in the short run.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  15. 15. This is due to speculation of both investors and short term traders.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  16. 16. When asking yourself what is a realistic profit when trading stocks, remember the tendency of the market to backtrack.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  17. 17. The Author’s Barron’s Effecthttp://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  18. 18. Years ago when Barron’s was only in print and not online, this author often purchased stocks mentioned in the publication.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  19. 19. My theory was two-fold. First of all, when the magazine interviewed experts in the matter ofhttp://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  20. 20. picking stocks, they often recommended stocks that had a good growth potential.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  21. 21. Second, everyone else read the publication and decided the same thing and went out to purchase the stock.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  22. 22. This author profited several times by purchasing the publication on the weekend and placing stock orders at first light, so to speak, on Monday.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  23. 23. The part about what is a realistic profit when trading stocks in this story is this.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  24. 24. I set 30% as the gain to expect before selling the stock in question.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  25. 25. I certainly missed out on further growth in a couple of these stocks but I also avoided huge losses in more than a couple.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  26. 26. What happened to market sentiment with these stocks was that when they failed to pan out,http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  27. 27. investors bailed in huge numbers, driving the stock price down.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  28. 28. And sometimes the initial advice was bad as well.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  29. 29. But being mentioned in the famous publication tended, in the short term, to drive stocks prices up.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  30. 30. History and Leveragehttp://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  31. 31. In trading gold you can use an exchange traded fund or you can buy and sell mining stocks.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  32. 32. History tells us that gold mining stocks rise faster in price than gold itself in ahttp://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  33. 33. bull market and fall faster than gold bullion does in a bear market.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  34. 34. If your expertise is in mining stocks the issue of what is a realistic profit when tradinghttp://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  35. 35. stocks is different than if you are simply doing technical trading of gold bullion via an ETF.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  36. 36. Trading consumer goods stocks typically results in less volatility than when trading biomed startups,http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks
  37. 37. etc. In any case, always consider what is a realistic profit when trading stocks, and exit your trades accordingly.http://profitabletradingtips.com/trading-investing/what-is-a-realistic-profit-when-trading- stocks

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