Stock Pick Tips
Here are the 5 common mistakes Traders make picking stocks to trade:
1. Relying on others to find stocks for you.
2. Not calculating the Risk versus the Reward before entering the trade.
3. Not correctly determining the proper Stop Loss placement, which affects risk calculations.
4. Choosing stocks that have risk which exceeds your personal Risk Tolerance.
5. Trading against the Buy Side Institutional sentiment and their trend direction. They invest Mutual and Pension Funds with giant lots.
TechniTrader is "The Gold Standard in Stock Market Education." Follow the link below to my webinar about How to Trade the Stock Market on my TechniTrader.com website:
The mistake of relying on others to find stocks for you is very common. Most often gurus and stock recommendation services, already have a vested interest in those stocks. They have purchased the stock before they recommend it, and naturally if they can convince tens to hundreds of thousands of their followers to buy the stock too then the price will go up.
So now you are thinking okay, sure so that would be great right? You could buy that stock and it will run up. But recommendation services are often large lot Traders. So as smaller lots buy, they start selling larger lots for profits. That is how they make their money.
TechniTrader is "The Gold Standard in Stock Market Education." Follow the link below to my webinar about the "Basics of the Stock Market" webinar lessons on my TechniTrader.com website:
When large lots are selling and smaller lots are buying, what is going to happen to price?
The weight of the larger lot selling will overwhelm the smaller lots, who have lower capital resources. Whenever large lots are selling they control price and that puts you at risk of whipsaw trades. If you have been trading at all you have probably experienced those more than once, or a sudden reversal of the trend in which you lose a lot of money.
The first step to successful trading is learning the process for finding excellent stock picks for yourself quickly by using stock scans.
TechniTrader is "The Gold Standard in Stock Market Education." Follow the link below to my webinar about "How to Use Scans" on my TechniTrader.com website:
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Martha Stokes CMT