Even during a financial downturn (or crisis) there are some great stock market opportunities just ripe for your pickin!
There are many methods, systems, philosophies and ideas when it comes to finding and evaluating stock picks.
There are penny stocks, options, EFT’s, stock indices, large cap, blue chip, and on and on. You can pick technology stocks, commodity stocks or derivatives of the spreads between different indices (yep, it’s getting complicated.)
The one thing we’ve noticed is that the most successful stock pickers stick to one area of the trading market. Learn that area to the best of their ability and focus on that one area until they are profitable. Don’t make the mistake of investigating a few penny stocks, then learning a currency trading system and then diving into options.
Take your time if you are new to investing in the stock market (or commodities). It can be exciting to watch the news and see these huge gains being made. But this isn’t Vegas! The big gains you see reported are the small majority of transactions and trades that happen in the stock market daily.
When investing in a particular stock pick there is always risk. You need to familiarize yourself with the markets, the terminology and the way that psychology moves the markets.
There are 2 basic types of trading. Some people like trading using charts. There is a whole science to calculating what will happen to a stock price based on it’s history over the short term and long term.
This is called technical trading. A true fundamental stock picker doesn’t care about the news, they focus on technical charts.
The second type of trading is called fundamental. This is when a trader investigates the news, the board, the trends and timing of a particular company and trades based on that knowledge. This type of stock picking can take a lot of research and time.
There are a lot of systems and automated software programs to help when it comes to picking stocks. Don’t just rush in and purchase a system and start trading with real money. Paper trading to gain confidence in your picks (as well as let you pinpoint your weaknesses), is a great idea.
Get comfortable, read as much as you can. Try and paper trade your stock pick expertise before you open a brokerage account and be patient.
Investing is the way the rich make the majority of their money. It takes knowledge, patience and emotional stability and insight to pick great stocks at the right time. The old adage is “buy low and sell high”. However, if you really watch the markets you’ll realize that most people do the complete opposite. There is a lot of wisdom that has been gained by those who pick winning stocks.
Don’t be timid, but do your homework first. And, good luck learning the art of picking stocks that make you money!