The traditional wisdom in stock market investing holds that you should buy established stocks that promise a moderate, but relatively stable, long-term return on investment. Some investors choose an alternate, short-term strategy called stock jobbing. In stock jobbing, investors try to take advantage of rapid stock price fluctuations, buying low and selling high, to create fast profits.
Open a Brokerage Account
According to U.S. News and World Report, if you want to try investing in the stock market or jobbing in share market activity, you'll need to open a brokerage account that lets you buy and sell stocks and bonds. You can opt to work through a traditional brokerage account, where a broker provides personalized service and advice. The fees for a traditional account often make them prohibitive for the frequent buy-and-sell pattern of stock jobbing. Online brokerage accounts, which provide minimal personalized service and advice, provide the advantage of much lower fees for trading, which lends itself to jobbing.
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Learn About Stock Charts
According to Investopedia, it is essential that you understand how a stock chart tracks the past performance of a stock in terms of price. Stock charts typically include graphs that show price movement as jagged lines that cover days, weeks or months of past trading. Some charts represent price movements as vertical bars, called candlesticks, that show the top and bottom prices for a given day.
Learn About Stock Levels
Understand the support and resistance levels of stocks. Some stocks will persistently fall to a particular price, rise to a particular price and then fall back to the original price. These are the support and resistance levels.
The support level, at which the price bottoms out, represents the point at which demand picks up and investors begin to buy. The resistance level, at which the price peaks, represents the point at which demand falls off and investors begin to sell the stock.
Choose a Stock to Buy
Stock selection for jobbing requires you to research the market. The right stocks exhibit ongoing price fluctuations but with relatively predictable support and resistance levels. After you find a stock that shows volatility, but within predictable limits, you wait for the stock to reach its support level and then purchase shares.
After the stock reaches its resistance level, you sell the stock shares and pocket the difference. To make stock jobbing profitable, you need to select stocks that demonstrate a large enough difference between support and resistance levels that, when you sell, you make enough to pay the fees and taxes but still make a profit.
Pay Your Taxes
You are responsible for paying short-term capital gains taxes at your current tax rate for profits on stock jobbing. The Internal Revenue Service may require you to pay estimated tax payments on jobbing profits. Consult with your accountant to determine if or when you need to make payments.