Stock Market Strategy For Big Profits

Buying the best growth stocks at the right time certainly can make you decent money in the stock market. If you want to make really big profits, adding to a winning position at the right time can achieve this for you.

First, if you have any losing stocks, sell them. This will give you extra cash to buy more shares of your best stocks at a proper strategic point.

Its always wise to only make new stock purchases or add shares to winning stocks when the general market direction is in a confirmed uptrend. This is because approximately 75% of all stocks follow the current general market direction.

Big institutional stock market participants such as mutual funds, pension funds and banks like to add shares to their winning stocks when they retreat back to their 50 day moving average line. This is usually done after the stock makes a solid price advance, then retreats to the 50 day line. You can use this same strategy with your best winning stocks. Just make sure your stock bounces off the 50 day line and starts advancing again. You don't want your stock to break below the 50 day line, especially on heavy volume.

Always remember to implement good money management when trading or investing. Cut your losses short and let your profits ride. That is the golden rule of trading. I suggest to never let your stock go down more than 10% from your original buying point. If you bought a stock at 40 dollars per share, you should set a stop loss at 36 dollars to protect your trading capital. You can always move the stop higher as the price of your stock advances.

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