Are you always on the lookout for new and off the beaten path trading techniques? We’re not talking about fads or notoriously strange approaches, just those that don’t get that much coverage in the mainstream financial media. Some are actually quite common among seasoned investors, but others are relatively new on the scene. Regardless of what your current favorite trading strategies and methods are, consider using one of the following to liven up and reinvigorate your daily buying and selling routine.
Dollar Cost Averaging
Dollar-cost-averaging is not new, nor is it all that uncommon. For some reason, the media ignores it and many newer investors and traders are not aware of the simple technique. Simply put, after you choose a company whose stock makes your short list, you make regular, same dollar value purchases of it for a fixed amount of time, usually over a longer term. DCA is popular with long-term investors, many of whom prefer blue chips and growth stocks. For example, if XYZ Corp is a company whose shares you decide to purchase, you would accumulate them over time by purchasing a fixed dollar amount of them, say $500, each month, week, or quarter.
Premarket trading has been around since the 1990s, when several of the major exchanges allowed ordinary investors, and not just brokers, to take part in the 90-minute session before the opening bell. By definition, all the action during this period happens before the normal session starts, typically from 8:00 a.m. until 9:30 a.m. EST. However, the rules allow for PT activity as early as 4:00 a.m. EST.
Buyers and sellers are connected via an electronic network, and there are not as many participants. PT can be a good way to get ahead of a major news report or earnings release. Prices can be volatile and there tends to be more risk than in regular market sessions, but profits can also be attractive for those who follow the new very closely.
Another unconventional but older style of securities buying is the dividends-only strategy. Practitioners of this approach identify companies that have long histories of paying regular, quarterly dividends. By limiting your universe of potential candidates this way, you automatically create a short list of dividend-paying corporations. That way, even if prices move up or down, you’ll still have something to show in terms of income from the position.
If you don’t want to deal with the hassle, or tax complications, of owning gold and silver bullion, consider buying exchange-traded funds (ETFs) and stocks that are directly keyed to the prices of those metals. Additionally, you can purchase stock in mining companies, whose share values tend to rise and fall with the market price of gold and silver.
The newest technique on this list is social trading, a method based on following an identified leader on a website or social media site devoted to stock market topics. The theory is that you are leveraging the ability of someone who has vast experience and thus reaping the rewards of that person’s ability.