Stock trading is not an easy task. That is why it offers the potential for great rewards. Many people get the impression from social media that it is easy to make a huge amount of money from stock trading. However, the reality is that stock trading can be quite difficult at times, and even the best traders can suffer substantial losses.

The stock market is always in a volatile state, and it can get affected by minor or major events. The COVID-19 pandemic collapsed in the stock market, and it is still recovering from the effects. But intelligent traders can make substantial profits from the recovering market using some key ideas. We will discuss six of those ideas that can be a part of your stock trading strategy.

Use Stock Trading Software

When it comes to stock trading, you shouldn't rely on predictions and forecasts. Wall Street professionals love to tell their customers that they can predict the future of stocks better. But the market situation of 2020 is one of the best examples of the futility of stock predictions.

Stock forecasts can be useful in preparing you for market volatility as long as you react on time. Whenever you see a downtrend emerging, it is best to move to the sidelines. But it is best if you rely on technical analysis software rather than a person trying to make a profit from it.

Stock trading software provides the necessary research and analysis of the stock market. That allows you to investigate the stocks that interest you. You can get information on the past performance of the company with accurate predictions of the future. The stock software also provides real-time updates on stocks and recommends the ones that are best for investment.

You will have access to indicators that study past patterns and provide accurate predictions and forecasts. Some of the best software offers advanced tools like charts and customised tax reports. They allow you to develop your stock trading strategy with risk management steps to avoid market crashes like the one in 2020.

When it comes to stock trading, you shouldn't rely on predictions and forecasts.

Keep Your Accounts Close to the Highs

You will have to double your efforts to make up for the losses incurred in 2020. Most people believe that long-term investments are the best way to compound your money. However, you can also compound your profits by keeping your accounts high and gaining continuous results.

Instead of holding onto a single stock and hoping to get rich from it, engage in aggressive trading. It will allow you to consider the best stock options and benefit from compounding your profits by keeping your accounts closer to the highs. 

Compounding profits in stocks can fail if you suffer huge losses, which applies to long-term and short-term trading. That is why you must protect your gains in 2021.

Profits Are Sporadic

The stock market always goes through ups and downs of various patterns. Therefore your style of trading should always be varied and focused on the bigger picture. In the post-COVID-19 market, you still have to follow the 80/20 rule. That means you will make substantial profits 20% of the time you spend on stock trading.

If you had an immediate success, you have to keep in mind that you might make little progress 80% of the time due to the shifts in the market. Bear in mind that you might not be able to predict the period of peak profit. So you have to be always ready to spring into action whenever the conditions are favourable and make maximum profit from it.

Use Charts

Some people think that they can rely on their ability to predict macroeconomic events. Such people have suffered huge losses during the COVID-19 market crash. Charts can provide you a framework for your stock trading in a million different ways.


They are not a way to predict the future performance of the stock market. But charts are extremely helpful to manage and monitor your existing trades. They can also help you anticipate when to buy or to sell your stocks.

Develop Your Own Approach

The best approach for stock trading is subjective to every person. Some people are efficient at following trends and developing momentum, while others work best with the fundamentals.

Therefore, you should formulate your own approach in 2021, depending on your methodology to view the market and buy new stocks. The stock market is always evolving, which means you have to keep modifying your methods to protect your capital and future investments.

Consider Incremental Trading

Most people feel that stock trading is a process of buying a good stock and then hoping to make a profit from it. The style of trading without a strategy resulted in huge losses in the 2020 market crash. In the new year, you should consider trading incrementally by taking an initial position and watching the action.

If you were wrong about the stock or market shifts, you would be able to sell the stock with the least amount of losses. On the other hand, if the stock is doing well, you can become aggressive and build your trade.

Stock trading is difficult, and that is why it has the potential for huge profits. Therefore you must have the right strategies to maximize your earnings from your investments. We believe that the methods we discussed above will prove helpful for your stock trading strategy in 2021.