oh, i see…. asked:
what is your method for selecting a stock and then deciding when to sell?
thank you for all the helpful information. any more tips?
what is your method for selecting a stock and then deciding when to sell?
thank you for all the helpful information. any more tips?
{ 4 comments… read them below or add one }
Short term trading is very much based on news for that day/week and little to do with macroeconomic trends affecting the sector/industry.
The best ways would be to pick up stocks that have momentum, buying if the momentum is upwards or “shorting” if downwards.
I would also look to see what companies have trading statements, interim or final result in the coming week or would be affected by ecomonic data being released in the EU/USA and select a stock accordingly.
First focus on quality. Without it, you’re subject to short term surprises.
Second, be conscious of what the market is doing that day. It will have a big impact on the direction of your stock.
If you’re day-trading, the VIX (volatility index) will have a big impact on the moves - both up and down - which create money-making opportunities.
If you’re swing trading, track the top recommended stocks by IBD (Investors Business Daily).
Read anything you can get your hands on by William O’Neill and Van Tharp.
Selling is dependent on the length of time you plan to hold. Short term you should know what your sell objective is before you buy, then honor it.
Long term you’re going to have to be willing to take wider swings in price to stay in the stock. example - when stocks retrace, classically they move down as little as 30%, and as much as 70%, before climbing again to a new high. The objective is higher lows and higher highs. But, a multiplicity of indicators determine whether it’s wise to be in a given market or stock, and on which side of the trade. There are no shortcuts, and trying to find shortcuts is why so many lose money before ever getting grounded and becoming successful. Be willing to do the homework. Van Tharp’s “Trade Your Way to Financial Freedom” is a great place to start, and lists numerous important references you need to consume, if you’re serious about trading stocks.
my favorite to trade are Direxion Funds shares. They are triple leveraged ETF’s. I have had trememdous luck with them. You can read more about them at
My favorite ones are FAS and FAZ (financial sector) FAS goes up when the market goes up, and FAZ is a bear fund, or INVERSE leverage fund. So when the market goes down, like the last few weeks since the short term rally after newyears, the FAZ bear fund goes UP. So either way, you have a chance to come ahead no matter which way the market goes.
here are some other Direxion triple leveraged shares:
Energy sector ERX (bull) and ERY (inverse or bear fund)
there are several others for the Russel small, mid and large cap, but particularly follow the same pattern of each other.
These shares have 300% leverage that are adjusted to perform 3x of the indicies which they portray. These are not meant for long term trading, and you need to set your stop loss as well. It is like trading stocks on steroids. An index 3% gain will now be a 9% gain. BUT a 3 % loss can be a 9 % loss as well. So it is very important to actually watch them or set trailing stops or stop losses in place. You might want to loosen the stops though because fluctuations of 8 to 10 percent between a high and a low are not uncommon, but you can use this to your advantage too. For example, pull up a chart on FAS. the last few days (today is jan 24th, 2009) the high was above 9 and the low was well below 8. The last 2 days I set my entry point for 8.00 and my sell point (stop limit order) for 9. I had two days consecutive that i made 10%
This is the best advice i can give for short term trading. Because of the 300% leverage, you can triple your gains. But again it is not meant for a buy and hold or long term.
These funds can be traded just like regular stocks. I reccomend scottrade because trades are only $7. Some say free or $4 but are tied with so many restrictions.
Good luck, these have been a blessing for me. These Direxion shares just got available in November, and since i heard about them in December, i don’t bother trading with anything else. The nice thing about ETF’s is you basically trade the indices. You cant get any more diversity than that!
learn technical analysis.