Picking stocks?

Kastro_316

Kastro_316

Just curious how everyone picks there stocks?

Do you study the for a few days before trading them?
What criteria must bet met before you pick that stock?

Thanx guys
 
Depends on the time frame. For a daytrade, liquidity and volatility are the key for me. For a swing trade or investment, superior performance plus an attractive entry point.
 
For swinging, I pick on p&f patterns. Before entering, I take a look on the sector relative strength to the market and the stock's relative strength to the sector.

Works nicely ... so far ...
 
I also do daytrading, so cannot say anything for swingtrades.

A daytrader can only surive (and in a good case make money), by trading "thin stocks". If you trade "thick stocks" (MSFT, CSCO) you're just having a nice time, but not making money in the long run, or veeerrrrryyy slllooooowwwly.
How to define "thin" stocks? Well, I would say, the best would be MSFT"s for tomorrow. But how to find them?
-They should have enough liquidity to be able to shuffle around 2000-5000 lots easy. So for me I keep around 3mln daily as a minimum.
-Not less than 5$
-Good volatility and high ATR.
-ANd in contradiction with the above, a low spread.

That's where the tradeoff comes. And finally, it depends on how much risk you can/will take, which is closely related to your account size.

TFD
 
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