Hey mooers , last week I shared trends&moving averages with you , click here to review it, and today, let's see how to pick the right stocks at the right time .
Firstly, smart stock-pickers have three big things in common:
They trade what they know, and know what they don't know.
They stay aware of the daily news, trends, and events that drive the economy and every company in it.
They use those goals and knowledge to inform the decisions they made to buy or sell stocks.
To trade what you know
Once you get a sense of the companies and industries that may present trading opportunities, it's time to build your own "control panel" of stocks.
With moomoo, you can start by adding company names into the Watchlist, then you can pull up quotes, set alerts, and check the calendar for any company actions such as earnings. Under the News tab, you can scan the daily headlines and hot spots. And under the Explore tab, there's a whole host of functions to help you narrow your search.
To get a sense of momentum and other technical indicators
Getting educated on a stock's fundamentals, such as revenue, earnings or losses per share, price-to-earnings ratios, and other metrics, is just one step in formulating a stock trading strategy. Once you identify a potential market or stock to trade, you'll need more information. Historical stock performance is an important thing to check. How has this stock performed over the last week, last month, and last year? For example, is the stock near its 52-week high or 52-week low? Is the stock's price diverging from its industry peers or the broader market?
Of course, past performance is not an indicator of future results, but brushing up on your history can't hurt.
Momentum indicators, for example, are among the technical tools that incorporate trading volume and other factors to measure how quickly a stock price has been moving up or down and the likelihood it may continue going that direction. When markets are in the process of changing direction, momentum readings often "diverge," flattening out or turning the opposite way (check out my column of MACD divergence! ).
To keep your eyes open
It's vital to keep up with market news and opinions. Reading the financial news and keeping up with industry blogs by writers whose views interest you is a form of passive research. The underlying argument can be a common-sense observation. For example, you might note that the emerging markets nations are producing new middle classes made up of people who demand a greater variety of consumer goods. As a result, there will be a surge in demand for certain products and commodities.
Taking the argument a step further, the investor can deduce that with an increase in the demand for a product, some producers of that product will prosper. This type of basic analysis forms the "story" behind the investment, which justifies purchasing a stock.