Top Stock Picks Guides, ETF/Stock Trading Alerts and Technical Chart Analysis by MPTrader
Read our guide about how to select top stock picks on your own or take advantage of our special offer and subscribe to MPtrader professional trading alerts.
Do you search for top stock picks on your own? Only few individual investors have the time, patience or requisite knowledge or stock market tools to do stock picking on detailed stock analysis and research. Not that it is impossible to find top stock picks on your own, but the point is every investor should do her own homework. If you would like to do stock picking on your own, we recommend you to read our article about different online sources to get a good stock investing advice, and then you should follow the following guides.
Top Stock Picks - Do It On Your Own Guides
There are many popular stock market trade strategies for finding good stocks (or at least avoiding bad ones). Top stock picks can be based on fundamental analysis like income, value and growth investing, or it can be based on technical analysis, like support/resistance, moving averages, RSI, MACD, momentum, gaps, Fibonacci, Elliott Wave and others, or it can be based on some other set of criteria, like following insiders or news trading for example. Some of the mentioned top stock picks strategies are short term while other are medium or long term oriented. All top stock picks strategies have the same goal, to achieve a rate of return that is greater than the market's overall average.
What I would like to warn you is that there is no infallible top stock picks strategy that guarantees success; there is no foolproof system for picking stocks, as many new investors believe! This doesn't mean you can't expand your wealth through the stock market. It's just better to be aware that there is no one way to pick stocks. There are a few reasons for this:
- So many factors affect a company's stock price that it is nearly impossible to construct a formula that will predict success.
- A lot of information is intangible and cannot be measured (like company's staff, its competitive advantages, its reputation, etc.), while there is always a question of reliable quantifiable information (like profits, which can be easily designed by innovative accountants).
- Because of the human (often irrational) element inherent in the forces that move the stock market, stocks do not always do what you anticipate they'll do. Emotions like fear and greed can change quickly and unpredictably. And unfortunately, when confidence turns into fear, the stock market can be a dangerous place.
Top Stock Picks Step No. 1 - Select Strategy
If you will do your own top stock picks, you should develop a methodology for stock selection and trading that is right for you. It is very important how well an investment strategy fits your personal outlook, time frame, risk tolerance, available funds, financial goals, and the amount of time you want to devote to investing and picking stocks. Whichever method or strategy of stock picking you will choose, if you become a good stock-picker, you can increase your personal wealth exponentially.
Top Stock Picks Step No. 2 - Create Watch List
The easiest, but at the same time most dangerous thing you can do is to purchase stocks at random. You should select industries and businesses you understand! An iron-clad investment truth is that an investor should never invest in something he does not understand. If you cannot explain in a few sentences what a company does, what products it produces and how it makes money, then you don't not know enough about the company to buy it. Investing in what you know means that you should use your own life experiences, work experiences, personal hobbies and interests and personal consumer savvy when searching for top stock pick.
Create a watch list of stocks and pay attention to the daily news and other pertinent market data. Stock screeners (Google Finance Stock Screener or Yahoo Finance Stock Screener) are extremely beneficial research tools that display a number of companies that meet pre-specified criteria and can be of great help when selecting stocks, since they greatly reduce the time you will otherwise need to make extensive researches. Stock screeners eliminate the chasing of stocks that are considered "hot" at the moment. They also eliminate emotions from your investment decisions. Stock screeners list a number of companies that exactly meet the characteristics that you require for your investing purposes. Additionally, most of them are free of charge.
Top Stock Picks Step No. 3 - Deepen Your Analysis And Act!
Once a stock has been identified as a possible candidate for investment, investors must drill down and learn more about the company, its financial situation and prospects for earnings. Earnings are what drive stock prices and picking stocks that will reap profits means picking stocks that show the best potential for price appreciation. Set purchase price targets and an exit price goal. Don't forget on risk management; define Stop-Loss in case you were wrong. And then ACT! Don't be afraid of acting, if you have followed all the steps of your trading plan and criteria's for entering the position are met. You have to risk some money to gain some, besides, all the risks are under control.
Top Stock Picks Warning - Avoid "Hot" Deals!
From time to time you probably receive advice on the next hot deal, but all you end up with is a substantial loss, because the hot stock news has reached you too late or you have taken the information from source not reliable enough - it may have some hidden motives for pushing you into purchasing this stock. Once a company has reached the newspaper headlines, you are not the only one who has found the "treasure"! Insiders and often some institutional investors knew this information before it was officially published and as a result, the stock price was already inflated and when it became public, professionals are "selling the news" and the stock price goes in opposite direction to our expectations.
After discussing ways to find the best stocks to buy, let's take a look at some ways of stock picking that are best avoided. A hot stock tip from a brother-in-law is usually not a good source for stock picking. Similarly, an unsolicited stock tip from brokers is often equally suspect. The broker may simply be attempting to move the firm's inventory. Finally, a stock tip picked up from one of the many Wall Street talking heads that regularly appear on television financial news networks is often not the best resource for stock picking.
Top Stock Picks - Subscribe To Reliable Paid Service Like MPtrader
For individuals looking for insight into market leading stocks and winning stock ideas, it is often best to subscribe to one or more free or paid website services covering this topic, like ETF trading alerts for example.
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Mike Paulenoff's technical chart analysis is among the most respected on Wall Street, coveted by hedge funds and institutional investors. As featured in Barron's, CBSMarketWatch, Wall Street Journal Online, and the cover story of Stocks & Commodities Magazine (Oct '04):
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Written by: Goran Dolenc
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