Published: by ailijic |
permalink Margin trading is a great form of leverage when investing in the stock market. Not everyone uses it because not everyone is approved for it, and like every form of loan whether it is a home mortgage or a stock position, tricks of the trade always help. The following are 9 tips for trading margin with success: 1. Know the interest rate. Just like every loan, there is an interest rate for what is borrowed. In the case of the stock trading, any online stock broker typically will charge somewhere around 8% a year interest on borrowed funds (rate varies depending on total portfolio value). By understanding the interest rates there is a stronger chance for investment success. 2. Buy over time, not in one shot. Depending on the portfolio size more often than not investors should buy into a position over time and not with one large order. Try taking half the position at first, find some headway (1 - 3%) to the upside and then add to it from there. This will keep your risk to a minimized level
Tags: margin trading,9 simple tips for successful margin trading,stock trading,margin trading tips,successful margin trading,margin call,leverage,interest rates
