Tricks to identify the right stock?

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03-16-2018,
epayoxo

I am new to active trading. In the past I have been a buy and hold investor, but now I have changed looking for more of a growth strategy. My goal is to replace my income from my job in the next few years. However, just a few weeks in I am getting frustrated. I am sure this is common, but I am hoping I can draw upon the experience of others to help me focus on some factors that will help me be more sucessful.

My primary frustration isn't losses since I haven't had any more than $50 or so thus far. It's the fact that out of the several dozen stocks that I have selected as good investments I seem to filter out the good ones and buy the ones that just never seem to go anywhere.

I mean heck at this point I wish they would do something, even hit my stops so I could move on, but they just move up & down 5-10 cents each day. One day up then give it all back the next day.

On the other hand the stocks I for one reason or another passed on just keep going up. These were on my short list so it's all the more frustrating.

$YOD Identified at around $3, passed on it because my capital is limited and didn't think the return would be good enough... It rocketed to close to $6 within two days.

$CPST Identified at around $1.60, but passed because it was at what appeared to be solid resistance. It's at $1.95 today and still rising. Going to try to get in tomorrow, but I'd be willing to bet that will end up being close to the peak.

$HK Identified at around $3.50, passed on it because my capital is limited and didn't think the return would be good enough... It has been over $4 in the last few days.

$IO Identified at around $3, passed on it because my capital is limited and didn't think the return would be good enough... It is over $4 now.

$PLUG Identified at around $3 passed on it because my capital is limited and didn't think the return would be good enough... Is it about $4.40 now.

After watching $YOD explode I stepped up and bought a few different stocks (and passed on the ones mentioned above) some of which were higher priced than I figured I should commit to ($HERO, $TWGP) based on a few analyst aticles as well as the best DD I have been able to muster with the extensive reading I've been doing. Both of these as well as $QTM, $CVM & $HEB have pretty much gone sideways.

Can someone please let me in on the secret of isolating what stocks are primed to move and which are duds? What are the most critical factor to look for in determining which stocks are about to move and what ones aren't?
03-18-2018,
runajihesidug

Tricks to identify the right stock?

It really comes down to your ability to time the breakouts and your time frame for willing or not willing to be in the trade. It has nothing to do with how much DD you put in. You can spend hours researching a stock and basically fall in love with it, but that doesn't mean others will. It's all based on supply and demand. Focus more on the price action of what is moving in the markets and less on the research and you will find more opportunities in less time. Don't beat yourself up over it, just adapt. Especially if looking to play low priced momentum, adapting quickly is a must. This is my primary focus and have been trading full-time since 2010.

One big thing is recent range (highs and lows). The ability to scan for this is my number one priority. Finviz has great free scans that you can play with to find the market movers. Today I found CNET early (1.60ish) and traded PRAN for a 70 cent win. Granted I use a fairly extensive intra-day scanning software program, but Finviz can help you do your homework at night to give you get an idea of what is actually moving in the market.

Research and fundamentals are great for investing in mid/large cap stocks that you may hold onto for awhile, but you're usually just wasting your time digging into the junk small caps that really only have potential to have potential. Most are losing money, need to do secondary offerings to stay in business, or have some pipeline of potential products that could take years to develop. So forget all that crap, it will drive you nuts. Learn to read the price action. Sure you can read news, but take it with a grain of salt and play the hot stocks without falling in love....

Also if one stock isn't moving, why the heck stay frustrated? Get out and move on to something else. That said, CNET & PRAN are not 'buys' unless you know what to look for. I was just making a point. There will be something else tomorrow I'm sure.
03-18-2018,
wuuwekouji

your post is one of the first things I've read that made sense. I have been using Finviz, just not in the way you suggested. Any tips on scanner settings or are those closely guarded secrets?
03-19-2018,
adasowice

And with limited capital you are in between the rock and the hard place. You have to look for something that will go up over days, weeks or months to turn you a profit after commissions etcs. In this market I think that is more risky as time keeps going on and with the millions (may be billions?) in the market that is on margin and the way the feds have been playing with all of their printing presses I don't think it is a good time to look for investments that will rise over the next three years. I have about 4 stock our of some 25 or 30 to go that I had 5 years ago and I will be out of the market completely after hours. Us that are able to day trade is really a good way to go as we are able to get in and out maybe several times a day. So what does the beginner do?

Look for the good companies. They are out there Coke, Microsoft, IBM and many more. Be prepaird to loose some money as none of us are able to get all of them right. Be able to cut loose when things head in the wrong direction and don't give up.