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The scenario is that a trader wants to trade just one stock through swing trading and take the profit. For example, the trader bought 50 shares of XYZ for the price $5. The stock went up to $7. He sells it immediately and take the profit of $2 per share. The profit is $100. He can then enter the same stock when it goes down to $5 and sell it when the price reaches $7. There are potential chances of stock can stay at $6 for long time or go to $3 or $8.

What are some of the strategies that traders can use to grow profit?

  1. Should the profit $100 received in the first trade be put back to buy more shares?
  2. Should the profit of $100 be moved to a savings account?
  3. How long the trader should wait before entering another trade? Once the stock has reached $7, there are possible scenarios of going higher to $8 or back to $3. It can also stay in $7 for long time like weeks.
wonderful world
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Buy something that you think will go higher and sell something that you think will go lower. Your success will depend on the accuracy of your prediction. There's no strategy that will work well regardless of what the instrument traded does. If there was, then other people would catch on and exploit the strategy until it no longer has an edge (efficient market theory). If you don't wish to predict, then simply buy an index fund and hold for a very long time. Prices tend to go up over time.

486DX2-66
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There's no correct answer here and what's appropriate depends on your age, risk tolerance, and goals.

If you want to have a shot at maintaining ROI, you have to trade with your gains. Putting gains in the bank will lower your yield, especially given that current bank yields are kaka.

I traded heavily when I was younger. Because I had a set amount of dollar risk, I consistently moved trading gains into safer investments. That was my comfort zone.

As for your trading questions, you need to work out a plan and then as you trade, evolve it. Learn from the process and give it up if it doesn't work. It's not for everyone or perhaps, everyone isn't for it.

Bob Baerker
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The taxes and transaction costs alone are gonna kill you. Plus you have to be constantly right about predicting the future. It won't work.

JohnFx
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