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Deciding on Which Stocks to Trade

Deciding on Which Stocks to Trade

One of the biggest reasons for success or failure when stock trading is stock selection. ‎Deciding on which stocks to trade makes all the difference. Too many try to catch ‎falling knives by buying fallen angels is all too common of an approach for stocks to ‎trade. In reality you want to try to buy the strongest and sell the weakest. It is very hard ‎to use this investment strategy when buying 52 week highs or absolute new highs when ‎the stock market is healthy. Most people want a bargain. They want to buy cheap and ‎sell high. They do not have a real plan when deciding on which stocks to trade. In many ‎cases high go higher as well as lows go lower. You do not have to take my word for it. ‎Richard Donchian traded this strategy for over 50 years buying breakout highs for his ‎commodity and stocks to trade. Look at some past stock market winners. If you waited ‎for them to turn down you would have caught a falling knife. You need to have an exact ‎plan when trading. Every aspect pre thought out. With this plan you will know which ‎stocks to trade.‎

In any every aspect of like be it sports, medicine, business etc., the most successful ‎people did not do it all by themselves. This is particularly true in stock trading or ‎commodity trading. The vast majority of successful stock traders and commodity ‎traders learned under a mentor. Stock Trading is a profession and like all other high ‎paying professions, it is those that chose to become professionals that wind up being the ‎winners. This is because in any competitive endeavor, any shortcuts to be found have ‎already been found by the professionals and used by them to their advantage. The top ‎consistent 10% of stock traders and commodity traders have learned that getting help is ‎the fastest way to get consistently profitable and capitalize on the opportunity that ‎trading presents. They learned how to build their trading plan. They keep that help even ‎when they have reached the professional level in their field. This is what a mentor does. ‎It is very much like athletes having coaches till the end of their professional career. ‎Same applies in trading and trend following.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts, commodity options or forex can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

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1 comment to Deciding on Which Stocks to Trade

  • yechiel

    I am a short term nasdaq/new york equity day trader with over 20 years of experience. I have developed a large scale automated system that is designed to trade a maximum of 2 hours a day. There is a point system that triggers the buys or the shorts based on overall market movement and the % of individual stocks being monitored that are trading above or below their open. No overnights. No holding. Everything is closed daily by 11:30 a.m. eastern standard time. There are built in daily downside stops. Very consistent. Looking for financing/investors. If you would like a copy of the business plan please contact me at bhaaron@hotmail.com Thank you. yechiel (michael) aaron

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