Don't be sucked in by a greedy broker who is interested only in making extra commissions.

Because I am considered a professional trader and know the pitfalls of buying and sellinng equities I continually caution investors not to trade indiviual stocks. Few have time or knowledge to do proper technical analysis. Fundamental analysis will not help in picking a "good" stock. No load mutal funds and ETFs (Exchange Traded Funds) do not have as much volatility.

Looking at the P/E ratios, cash flow analysis, corporate management strategies, etc., etc. all look so good by Wall Street, especially when a stock is peaking out. This type of nonsense is like honey to a fly who then becomes trapped. The better it looks the less chance it has of going higher because everyone is already on board and there is relatively little buying power left to move it up.

This is when the volatiivity sets in giving the smart money a chance to sell to the last few dummies. Knowledgeable investors try avoid these stocks.

The little investor (that's 98% of investors and brokers) have no exit strategy and remain trapped while the stock that looked so "good" retreats to a lower price.

Now is the time to try to find a completely different equity. Look for one with a smooth upward pattern. Buy it and this time know how much loss to allow if it goes down. How do you do that? Very simple. Use a trailing loss limit order called an open stop-loss order of not more than 10% under the lowest price of the previous month - and keep moving it up each month as the price advances. That way you will not give back profits.

Unless a person is an experienced trader he should not be investing in highly volatile stocks.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.

Copyright 2007 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"