Practice Makes Perfect. Six Ways To Profit From Speculative Investment

Some people say that the stock market is a "Tool" To make money, but if you do not master certain operational skills, not only can’t earn money, but will lose money. The author in practice to find out the following profitable methods, you may wish to try.


Method 1: Short-term profit method
Short-term profit method is when a stock once the upward market to buy a large number of, to be in a short period of time the stock price rose to a considerable height and all sold out of the investment techniques.
The strategy for short-term profits is based on the fact that when a stock price rises to a certain level, it tends to cause large fluctuations, and at this point, it is very easy to create a rush of people to buy, so that the stock price will continue to climb and reach new highs. Therefore, if you are accurate in your predictions, you can buy when the price rises and sell when it continues to rise, you can make a considerable profit.
The advantage of this method is that it can seize the opportunity to profit during the period of rising share prices and improve the efficiency of capital output. The disadvantage is that, firstly, after buying at a high point, the market may reverse, causing investors to suffer losses; secondly, after selling at a higher price, the share price may continue to go higher and not get the maximum benefit. Therefore, the short-term profit method requires two points of attention: Firstly, to strengthen the analysis and forecast; secondly, to choose the right time to buy and sell.
The short-term profit method is suitable for those who are aggressive and have a high risk tolerance.
Method 2: Batch buying and selling method
The batch buying and selling method means that when the stock price falls to a certain level, investors start to enter the stock market to buy in batches; and when the stock price rises to a certain height, they start to sell the shares they hold in batches.
The batch buying and selling method is an investment method based on overcoming the indecisive weaknesses of human nature. The good intention of a stock investor is to be able to buy at the lowest price and sell at the highest, but few people actually get what they want in the market. It is often the case that when the price of a stock falls to the point where it is ready to enter the market, many investors believe that the price will continue to fall and remain on the sidelines, and then regret it when the price rebounds strongly. In addition, when the price rises to the point where it is time to get out of the market, they believe that the price will continue to rise, and when the price falls, not only do they fail to sell at a good price, but sometimes they have difficulty getting out of the market.
Batch trading overcomes the above-mentioned drawback of choosing only one point in time to buy and sell. As a result, when the share price falls to a certain low point, the investor can start buying, even if the share price still falls after buying, the investor can still buy one after another. Similarly, when the share price rises to a certain high point, investors will not be greedy and cannot sell, because even if the share price continues to rise, investors still hold some shares in their hands, and can still profit by continuously selling. As for the timing of buying and selling in batches, it is best for the investor to determine this based on some technical analysis. The usual method is: When the relative strength indicator of a stock is below 20, it means that the price of the stock is already low, and the possibility of its rebound is great, so it is advisable to enter the market to buy in batches; and when the relative strength indicator reaches 80 or more, it means that the price of the stock is already at a high level, and the possibility of its decline is great, so the stock held should be sold in batches.


Method 3: Average cost investment method
The average cost investment method, also known as the amount of average method. It is in a certain period of time, a fixed amount of money in installments to buy a certain stock of investment methods.
The specific method of operation is: Select a certain long-term investment value and price fluctuations of the stock, in a certain investment period, regardless of the stock price rise or fall, adhere to the same amount of money to buy the stock on a regular basis. In this way, the investor's average purchase price per share is lower than the average market value. The advantages of the average cost investment method are: Firstly, the method is simple. Investors only need to invest a fixed amount of money on a regular basis and do not have to consider the timing of their investments; secondly, they can avoid the risk of buying too many stocks at high prices and have the opportunity to buy more stocks when they fall; thirdly, they can make continuous investments with a small amount of money and enjoy the benefits of long-term stock appreciation.
Three things should be noted when using this approach: Firstly, you should choose stocks of companies with stable operations and rising profits; secondly, you should have a long investment horizon. If the period is short, the effect will be less obvious; third, you should choose stocks with a wide range of price fluctuations and an upward trend in share prices.
The average cost investment method is suitable for those investors who have a regular, fixed source of funds.
Method 4: Fisherman's withdrawal method
The fisherman's withdrawal method is one of the portfolio methods of stock investment. It refers to the idea that stock investments should be made like a fisherman casting his net, investing money in a variety of stocks over the same period in order to make profits and reduce risk as stock prices rise and fall.
The advantage of using the fisherman's net method is that it allows you to reap the benefits of equity investment while diversifying your investments to reduce risk. For example, when the stock market is in a bull market, as various stocks will rise in rotation, stock investors can then dump their stocks one after another to gain profit. Even in a bear market, there will always be some strong stocks as the investor holds a variety of stocks, and the stocks in hand may partially offset the rise and fall, thus reducing the investor's losses.
However, as this approach follows the rule of "Sell whichever stocks are rising", it is easier to sell stocks in your hands when prices are low and hold on to poor quality stocks for a long time, thus reducing your profitability. For this reason, there is also an "Anti-fisherman's retreat" Approach to investing in the market, whereby one selectively buys a variety of stocks, buying more of whichever one is rising and selling whichever one is falling. Since most of the time the strongest stocks are stronger and the weakest are weaker in the stock market, this approach may allow investors to keep more of the strongest stocks and protect their future profitability. However, since the "Anti-fisherman's net" Method is based on the rule of "Selling whichever stocks are falling in price", it is easy to reduce the profitability of traded stocks. There are advantages and disadvantages to both methods and investors can use their own discretion depending on their circumstances.
Method 5: Pyramid buying and selling
pyramid buying and selling is a variation of the batch buying and selling method. This method is a simple triangle (i.e., Pyramid) for the high and low price of the stock, as a guideline for buying and selling, to properly adjust and decide the number of shares to buy and sell. It is divided into two types: The pyramid buying method and the inverted pyramid selling method.
Pyramid buying method, that is, the positive pyramid (positive triangle) of the bottom of the base is wider and the more up the smaller, the wider part shows that when the stock price is low, buy a larger number, when the stock price gradually rise, buy the number should gradually reduce.
The advantage of this pyramid buying method is that if the share price is still on an upward path after the first purchase is made, the investor can make a second or third investment to increase his chances of profit. Although it is not as profitable as a full investment, it reduces the risk of a fall in the price of the stock. If the share price falls after the second or third purchase, the second or third purchase of fewer shares will not result in too much loss. The pyramid buying method, which involves buying fewer and fewer shares, thus increases profit opportunities and reduces risk.
The inverted pyramid method of selling is the opposite. The inverted pyramid is smaller at the bottom and wider as you go up. Therefore, the inverted pyramid selling method requires that the number of sells increases gradually as the stock price rises. It has the advantage of being able to sell shares at a popular time, making it easy to get out and getting a better spread while reducing risk.


Method 6: Capital preservation investment method
Capital preservation is a method of investing in stocks to avoid running out of money.
The "Capital preservation" Referred to here is not the total amount of money the investor uses to buy shares, but the part of the total investment that is not allowed to be lost.
The most important aspect of this method is not the timing of the purchase, but the decision to sell, and therefore the formulation of the profit selling point and the stop loss point is key.
The profit selling point is the point at which the investor resolutely sells when he has made a certain amount of profit on his investment. This is the point at which the investor does not sell all of his holdings in one go, but rather sells the portion of his capital that he wants to preserve. For example, if an investor has 50% of his total investment in mind, the point at which he will sell at a profit is when the total market value of his holdings reaches 50% of his initial investment. At this point in time, the investor can sell 1/3 of all shares to preserve his "Capital".
After this capital preservation exercise, the total market value of the holdings remains the same as the total amount of their initial investment. Thereafter, the investor can make a second "Capital" Holding that he/she wishes to protect. Using the above investor as an example, if the investor changes the "Capital" Of the remaining holdings to 20% after the first capital preservation exercise, this means that the remaining holdings, which have risen by another 20%, can be sold for another 1/6, and this part of the the "Capital" Is preserved, and then the "Capital" Of its remaining holdings is formulated again. And so on, as the market continues to rise, the number of shares held is bound to decrease. However, the total market value of the holding remains the same, always equal to the total amount of the initial investment. It is important to note that the profit selling point is a method for rising markets.
In a falling market, a stop-loss point can be set to prevent excessive losses. The stop loss point is determined when the market has fallen to the point where the investor has only the "Capital" Left in his mind and is given the opportunity to sell to preserve his minimum "Capital" Position. Simply put, it is the point at which the market falls to a certain level and the investor retreats to avoid suffering excessive losses.
The capital preservation method is suitable for use when the economic climate is bright, when there is a significant disconnect between share price movements and actual factors and when the stock market is unpredictable.