How to Make Money Stock Trading
How to Make Money Trading Stocks
If you are trying to make money from the stock market, then you may find it is quite difficult (although not impossible) for a beginner. It is useful therefore to get some advice from someone who actually makes a living from the stock market and who is willing to share his ‘secrets’ for free.
One such person is Robbie Burns who runs a website called the Naked Trader where he gives detail of his online trading in his ‘trading diary’. He is good at what he does and the Motley Fool has published a podcast interview with him on their UK site.
His ‘trading diary’ shows how you can make money stock trading his latest buys and sells, with the buy price, the target price for when he might sell and the stop loss price at which he will close the trade if it turns out to be a mistake. His trading sytem is simple and is basically common sense set down in writing. He does pretty well from his stock trading, even when the markets go down as they did in the ‘crash’ of 2007 – 2008.
What is more useful for stock market beginners is that he explains why he does what he does. His book ‘The Naked Trader’ gives a very good explanation of the basics of his method.
His method is simple enough. He buys shares in companies that make a profit and have good prospects. He tends to avoid penny stocks and stocks that are falling and concentrates on stocks that are in an uptrend and regularly provide good company reports. He holds the stocks for a few weeks or months then sells if he thinks they have run their course. He also has a very simple system for deciding which companies not to invest in. If a company report uses the word ‘challenging’ in its report then he takes this as being code for ‘trouble ahead’ and so he look sfor something else. In addition if the company debts are more than 3 times their profits then he is not interested, he looks for a company without so much debt.
He also looks at a company’s p.-e. ratio but in his own way. He takes full year profits, multplies this number by ten, knocks off any net debt, and adds on net cash. He checks this figure against market capitalisation, and this tells him whether the share is cheap or not. It’s his own way of doing things but it works !
Robbie Burns is worth taking a look for a number of reasons a) he has many years experience b) he actually knows how to make money on stock market c) his method is easy to follow although you would need to buy his book to see all the details d) he gives away a lot of information for free on his Naked Trader website. So whether you are a beginner or an old hand but are not making money from your stock trading then check him out.
