The Best Stocks For Stock Trading

Finding the best stocks for stock trading isn’t as difficult as it used to be. In fact, the stock market these days makes trading stocks easier than ever. If you want to buy stocks and hold them, that’s one thing. But if you’re set on trading stocks, there are some out there that are actually designed for that purpose, believe it or not.I got into stock trading and options trading in 1973. To me, nothing was more frustrating than calling the stock market correctly, and then making the wrong stock picks. These days, finding the best stocks to trade is virtually a piece of cake.Start by asking yourself what segment of the stock market you want to trade. Then decide whether you want to bet UP or DOWN. Then, how much action do you want in terms of volatility or leverage?When the stock market is on fire, you don’t have time to analyze a long list of traditional stock issues. Be prepared ahead of time.Leveraged and inverse ETFs are not for people who want to buy stocks and hold them till the cows come home. They are designed for stock trading. Whether you want to bet on the up side or down side, they are in my opinion the best stocks to play.Most people think of stock trading in terms of making quick profits when the stock market is going up. I have found that the real profit potential in trading stocks is on the down side. Let me tell you why.Let’s take a stock market that is full of uncertainty as in the fourth quarter of 2009. Stocks had moved up over 50% in only 7 months. One fly in the ointment could cause heavy selling, especially in the short term. Throughout history, the biggest short-term moves on a percentage basis have been on the down side.A few years ago, taking a short position (betting DOWN) was not as easy as it is today. For example, you could short a stock or buy PUT options. Many people who were interested in stock trading were not inclined to do either because they found both alternatives intimidating.Now you can buy stocks that go up big time when the market or a segment of it falls. These are called LEVERAGED INVERSE ETFs. These stocks trade like any other stock. They are actually funds (exchange traded funds) designed to track a stock index inversely with 2X or 3X leverage. They accomplish this by investing in derivatives.To you, it means this. If you think that stocks in general are in for a nasty fall, you can make a simple stock purchase and get a piece of the action. For example, stock symbol (SDS) is a heavily traded ETF that attempts to inversely track the S&P 500 Index with 2X leverage. If the market as measured by that index falls 2% in one day, SDS should go up about 4%.If you’re into stock trading, ETFs were made for you. You can bet on the market in general or on various sectors including gold, real estate, and financial stocks. Not all ETFs employ leverage, but many do.In stock trading don’t overlook the action on the down side. If you’re really good at trading stocks, all you need is market volatility. And the biggest profits can be made when the stock market has a really bad day or two.