One common dilemma that people have is how to go about trading stocks online when they work full time and they have no computer access during the day. I would like to have a nickel for every time someone has asked me this question. A few years ago, this was indeed an obstacle, but it really isn’t anymore. In fact, it can be done pretty easily with the trading tools of today.
I remember when I was working full time before I left my job permanently to trade stocks, I was fortunate enough to have a PC at work where I could monitor my trades occasionally. Now mind you, I could not spend my entire day watching stocks or I would’ve left my job sooner than I did and not by my own choice
The great thing about today is that most all of the popular online stock brokerages offer tools and trading consoles that are fantastic and allow these full time workers to get the benefits of trading stocks online. If you have an account at one of the most popular brokerages, then you shouldn’t have any problems at all doing this.
Let us review the steps you need to take to trade your stocks online automatically while you are away from your computer.
First Step to Trading Stocks Online — Screening Stocks for Consideration
Obviously, in order to tell your trading console what steps to take in your absence, you need to perform some legwork in the evenings. What I always did was sit down after dinner and use a robust stock screener. You will be amazed at the screeners available for free on the major financial websites. This is in addition to the one that your broker probably offers.
Depending on your trading style and objectives, you need to define the criteria of the stocks you want to trade. More specifically, you want to identify stocks that are ripe and ready to make the move you require for purchasing.
For me, I like to have screen out about 40–50 stocks that have my interest. I also have criteria as to when they fall off of my watch list, so that I can examine new stocks that meet my criteria. In my particular trading plan, I never own more than 5 stocks at any one time — just to give you some perspective on how I trade.
Watching the Price Action
Once I have my watch list, I then sort them into a specific folder on my stock charting software. I have always used MetaStock because it is both powerful and flexible. And with this software I can easily save my watch list and can quickly scroll through the charts every day. I want to stress here that you do not need to buy a software to do this, you can find great charting tools online and at your broker.
Every technical stock trader and stock trading system has a certain pattern or group of patterns that they look for on the stock’s chart. I use a few indicators on my software to help me time my trades after I see the buy patterns develop. Trading stocks online can be an art when it comes to reading charts.
When I pinpoint a handful of stocks that are beginning to ripen, I put those into a “hot list” and keep those charts handy. The hot list contains stocks that are almost ready to buy.
Understanding Your Buy Points
Ironically, even though I am now free to buy stocks manually at home, I still use the same tools that I used when I was working full time to buy stocks. I just think that computers are better decision makers than humans are.
The real key at this point is understanding and identifying the conditions for buying a stock. I am always amazed when I talk to people about their buying decision. It seems that many of them cannot really describe their buying conditions. It’s like the pattern develops and then they buy the stock.
That’s not a good practice in my opinion. Even though the pattern is there, the stock needs to make a move to confirm it is time to buy. There are always good patterns out there, but very few of them turn into profitable trades. I think people are so eager to buy the stock that they don’t wait for the confirmation move.
The Beauty of Letting Your Stock Get Bought Automatically
When trading stocks online, the biggest reason I let my trading console do it is because I am ensuring that my stock makes a confirmation move first. This gives me a better chance of having a profitable trade.
My confirmation move is simple. I like to buy stocks in an upward trend that have pulled back for a few days and have then started to resume their move upward again.
After the stock price has either pulled back for 3–5 days or has fallen into a major moving average line, I place a buy stop order to buy shares when the stock’s price rises $0.15 above the previous day’s high. If the order is not filled, then I place it again the next day. If the order isn’t filled after 3 days, then I abandon that stock and look for another.
Protecting My Trading Capital
The trading consoles at most of the major online stock brokerages today provide the ability to easily protect your capital. This can also be done automatically when you are working.
After you have automatically bought a stock, you can have the console automatically place a stop loss order as well. You can tell it to place the stop at a price either a certain number of points or a specific percentage behind your purchase price. Isn’t that wonderful?
I always use a trailing stop so that it moves up as the stock’s price moves up and locks in the paper profits. This ability gives you total piece of mind while you are trading stocks online and you are away from your computer.
Hopefully, after reading this article, you have discovered how easy it is to trade stocks online. The beauty is that you can do it easily and safely without putting your hard earned investment capital at enormous risk. Instead, your investment risks are always controlled and kept at a minimum.