Tricks to identify the right stock?

[agvamihuuzo]

Hello,

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.

[aixuzayimau]

haha ye there's the rub isn't it. Lot's of strategies out there. Momentum trading, buy weakness, sell strength, on and on. Everyone tryna get your money. Tastytrade.com has a good video on equity selection.
here are some of their youtube vids. But the website is archived and more organized.

[ahonepewafafo]

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.

[AlannahHun]

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.

[akvukinaajqo]

When I was seeking the grail of drone clone direction selection I used the following settings:
At top middle select "ALL" tab (right under "Signalhttp://onlinetradersforum.com/styles/default/xenforo/clear.png
Market Cap= whatever I was looking for as far as size was concerned. Smaller caps I considered cheaper and maybe more volatile.
Beta= over 2 or 3. Again looking for potential volatility or movement.
Price= setting criteria to either weed out too cheap stuff or too expensive.
Float Short= 20% or more if I was looking for potential short squeezes.
Average Volume= over 1mill at least if not 2 mill.
Change/Pattern = might use these to look for different movement and or the different simple moving avg setting to find price extremes.
Then I would always set "Overview" for TA as I like to see the charts.

You can always try different stuff, helps a lot to weed out or add this and that.

But if you want some fun rides look for a stock you can afford that has earnings after market (there's a filter for that and high volatility helps) and pick a direction that sounds good. You can read the charts, flip a coin, ask your cat...it really doesn't matter in the end...you are going to be wrong 1/2 the time. Take a position before end of market and watch for earnings. If you're right the payoff is nice...if you're wrong get out. The trick is to lose less than you gain.

Also you can sit and watch live news feeds after hours or pre market....wait for a news story, FDA approval, patent announcement, buyout, takeover, whatever on a stock that you can afford to buy enough of to make a difference. If the chart looks good like there was previous price support or something (again it really doesn't matter) you just want to jump in and out of something that looks like a quick ride. I did this for several months...didn't sleep much but did ok. Sometimes you're out the same day sometimes it rides a minute. Sometimes it has already moved too much. But you will learn a lot about momentum and psychology.

Because there are many successful traders using different strategies....and using strategies that another person would be a failure at....I have come to believe that the important thing is to find something that gives you the confidence to get engaged and stick to a plan. I really don't think there is a holy grail, a black box, a secret way, that will work for every body. See what feels right for you and go for it...be willing to change and adapt....Losses are like tuition. Stay small, create lots of occurrences, manage winners....Good Luck.