Stock Trading Basics - What Everyone Forgets About Trading | StockedUp

The ONE Thing That Everyone Forgets About Trading

Too many people overcomplicate trading. Yes, the stock and options markets are complex but that doesn't mean you need a complex stock trading strategy. Oftentimes, some of the best traders have the most simple trading systems. You don't need to be particularly good at math or programming to be a great trader. To grasp stock trading basics, all you need is a little bit of common sense and a lot of hard work.

I've witnessed that too many traders put way too much emphasis on Fundamental Analysis or Technical Analysis. I've found that a little bit of both works best. For example, in the video linked down below, you can see how I saw a divergence between JNJ (Johnson & Johnson) and the SPY (S&P 500). JNJ was up while the rest of the market was down. Keep in mind, JNJ is a DOW stock, so it mirrors the market pretty effectively. I bought JNJ 140 strike puts on Tuesday for $40 and by Friday, they were worth over $150. This trade didn't require any special or advanced analysis, it resulted from one stock trading basic: common sense. A huge stock like JNJ was up while the entire market was down.