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How Do YOU Pick A Stock?

Discussion in 'Investing/Trading/Cryptocurrency/Altcoins' started by NerdSmasher, Sep 2, 2007.

  1. NerdSmasher
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    NerdSmasher New Contributor Read Millionaire Fastlane

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    Essentially, how is it that you determine where a stock is going (or where you think it's going) and what you want to do with that information (buy, sell, short, put/call options, etc.)? Also, what resources do you use to get the information?

    Personally, I mostly do T/A, using stockcharts.com. I like the MACD indicator, as it is pretty good. In fact, for those who don't know how it works, I saw some youtube videos that actually showed me how, here:
    [ame="http://www.youtube.com/watch?v=OR8vwFv-5iU"]YouTube - technical analysis indicator MACD[/ame]
    [ame="http://www.youtube.com/watch?v=Hz4tuWGQqfo"]YouTube - Technical Analysis Indicator MACD part two[/ame]
    [ame="http://www.youtube.com/watch?v=4ybk72R9_90"]YouTube - Chart Analysis MACD part three[/ame]


    Other than that, for the little fundamental analysis I do (because I'm usually in for a quick profit) I just use nasdaq.com. And look at the company's financials.

    To find stocks, I just throw random large companies into stockcharts, and see how the MACD is looking, if it looks bullish or bearish, and will usually buy if it looks bullish. I'm trying to come up with a good plan for buying puts/calls regarding the MACD, because I think it could be a lot more profitable than just the couple of % I usually would get in a week by buying. But, we'll see how that goes.
     
    Rawr likes this.
  2. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Smasher,

    I am a technician -- I look at charts and my 2 key indicators are typically 50 Day MA and 200 DAY MA -- 50 being the short term trend and 200 being long term. I look for crossovers on huge volume. I typically only trade in companies that have the fundamentals to back up the chart. A strong chart can be tore apart by a bad earnings report or "same store sales fell" Conversely, a weak chart can be further weakened by continued poor news. MACD also works well and is commonly used as is OBV and RS.

    I stock screen with Ameritrade Apex - for options OptionsXpress.com.

    TradeStation is great as well.
     
  3. Rawr
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    Rawr Gold Contributor Speedway Pass

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    NS thank you for the videos and introducing me to MACD! I watched the videos, now I finally have some idea of what the technical side looks like.

    Where do you view the charts? I tried yahoo but it was hard to read some info. If you have any examples of how this helped you (and pictures!) please post.

    Looking at 50 and 200 MA next hopefully learn something new.

    To throw this out there and see if I read the charts right -

    GS should be going up
    Crox should be going up decreasingly
     
  4. NerdSmasher
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    NerdSmasher New Contributor Read Millionaire Fastlane

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    Well, a great place to look at charts is StockCharts.com but they only show the daily or weekly periods unless you subscribe (which I haven't done). They have the best looking charts I've found. But, since I signed up with OptionsXpress, I have been using their charts since I can watch them as the market is actually going on, and still use all of my studies, though they're not as pretty as on StockCharts.

    I'm sorry to say that I don't have any examples of how this has helped me (yet!) because I only learned about it a few months ago, and have only begun trading again recently. And, as of yet, I haven't had too great of success, but I'll get there!

    And, I do believe you're correct with what you've stated about CROX and GS, though, remember to use other information before deciding whether a stock should go in a direction, there is no single perfect indicator. And, of course, news can screw up everything you find in T/A. Just gotta keep learning new things, and have a plan!
     
  5. kimberland
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    kimberland Bronze Contributor

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    For my long term buys,
    I like to buy stocks where
    the selling price is equal to or lower than the book value.
    Combine that with a good business
    and great management (with an ownership stake)
    and I figure the stocks will go up (eventually).

    What stocks do I buy?
    I generally avoid anything large and/or covered by tons of analysts.
    No real bargains there.
    Small to mid cap is where I hunt.
     
  6. bflbob
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    bflbob Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    I buy my stocks based on a formula.
    The formula, if drawn on a chart, would look like a cup.

    Basically, I'm looking for a stock that has hit a new 52-week high...
    ...but the old high had to be about a year ago -- not just recently.

    My thought is that the company went through a rough time, corrected the problem, and is headed for the good times.

    I studied about 1,000 stock buys made by this pattern on MetaStock.

    What I found was a pattern that was fairly reliable.
    I use the pattern to buy, re-buy and sell my stocks.
    Over the past 3 years or so, I've managed an average return of about 30-40% annually.
     
  7. Rawr
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    Rawr Gold Contributor Speedway Pass

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    Wow, this is interesting, I would love to hear more about this! So where does the other side of the cup come in?

    Is there a screener that makes it easier to look this stuff up or do you have to do it manually?
     
  8. NerdSmasher
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    NerdSmasher New Contributor Read Millionaire Fastlane

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    So you like the cup and handle pattern, eh? I've heard a lot of good things about it, but I've never found one and tried it out myself. Good to hear it's useful though, I'll have to find one :)
     
  9. RAiMA
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    RAiMA New Contributor

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    I engage in an options trade based on a number of criterias:

    * Good reward vs risk - must earn a minimum of 20% per trade for the amount of money at risk
    * Has to be out of the money
    * Small Spread on option
    * Good market volume
    * Short monthly contracts
     
  10. tchandy
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    tchandy Contributor Read Millionaire Fastlane

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    I look for stocks from good companies that are undervalued and have a bright future. I also look at the market because some markets and how the government is responding since it will have an affect on some stocks. I also through in a wildcard or two on some stocks that I think have a big upside in a volatile market. I haven't put to much in this area as compared to others.

    Tom
     

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