Stock Flipping: A Beginner's Guide to Short-Term Trading

Open an online brokerage account

There are many tools available to investors to make quick profits. One tool that is available is flipping stocks. This is the process whereby a stock is bought at the close of one trading session and sold at the start of the next trading session for a profit. The potential for gain in flipping stocks is based on research that suggests if the market closes within 20% of its highs, then there is an 80% chance that it will move even higher at the opening of the next trading session.

Step 1

Open a brokerage account with a traditional broker or with one of the many discount online brokers such as Scottrade or Ameritrade. A discount online broker is going to cost less in trading fees and give the investor more flexibility in managing his own account.

Step 2

Follow the market trend for the day and be sure it is finishing in an upward trend. There are many on line sources for up to the minute tracking of the market in general as well as individual stocks. Some sources for this are MSNMoney, SmartMoney or Yahoo finance.

Step 3

Select stocks that are finishing within 20% of their highs for the day. An investor can make selecting stocks easier by looking at the sectors which are finishing the session within 20% of their highs and choosing the strongest stocks in those sectors.

Step 4

Sell the stock the at the opening of the next trading session if it is up. A common mistake that investors make when flipping stocks is thinking that they will go even higher than they have and they hold on to them. If a stock is bought with the express purpose of flipping it, then it should be sold at the start of the next trading session when it is up.