How do you pick your stocks?

[Ceiling Cat]

I have been asking around and many people tell me that they pick stocks according to what looks good or they go with the herd. I have my stock sectors picked out way before the stocks pop. This week I bought oil stocks on Monday before oil stocks perked up. I am anticipating that cannabis stocks will pick up soon. I think you have to be aware of the situation in the industry before you invest to get the most out of your investment.

Before I invest, I make myself aware of of what is happening in the company and the industry. The first and most basic is checking the 20, 50 and 200 day moving averages of the stock. Check out to see what the possible logical gains and losses of the stock can be so that your expectations are not too great. Then I do at least the basic technical analysis of RSI, MACD, Stockastics, Bollinger Band and Vwap. There are other methods, but if you complicate matter you will be getting conflicting signals.

How do you pick your stocks to invest in?

 

[Indiana]

I just pick the ones recommended here

 

[Ceiling Cat]

I am getting the impression that most people that buy stocks are doing the ENNIE, MEANIE, MINEY, MOE to pick a stock to buy. Am I the only guy that does research and goes out hunting for my opportunities when others pick what logically looks good and wait for a return? Both methods work, but I think the pro active method works much better.

 

[Sonic Temple]

@Ceiling Cat - what are the 20, 50 and 200 moving averages? I have been slowly learning this stuff and am keen on learning more.

 

[Rukos_48]

I have been asking around and many people tell me that they pick stocks according to what looks good or they go with the herd. I have my stock sectors picked out way before the stocks pop. This week I bought oil stocks on Monday before oil stocks perked up. I am anticipating that cannabis stocks will pick up soon. I think you have to be aware of the situation in the industry before you invest to get the most out of your investment.

Before I invest, I make myself aware of of what is happening in the company and the industry. The first and most basic is checking the 20, 50 and 200 day moving averages of the stock. Check out to see what the possible logical gains and losses of the stock can be so that your expectations are not too great. Then I do at least the basic technical analysis of RSI, MACD, Stockastics, Bollinger Band and Vwap. There are other methods, but if you complicate matter you will be getting conflicting signals.

How do you pick your stocks to invest in?

Hey man, everything here is right, what you missed to take in consideration is volume. Low Volume in 70+ RSI will most likely get shorted by high frequency trading bots or other traders. (Watch your bollinger bands, and pair it with Ichimoku clouds and put a 200 ema on top of your chart. Try to flip between candles and liens)

Especially on stocks that are famous on free platforms. Best example is SNDL, watch it at 51 to 64 RSI Low Volume and all of a sudden, you get this unnatural peaks(Massive volume). Same as the opposite direction when RSI is overbought around 74 to 81

One word to add in your vocabulary: Elliot Wave

 

[Rukos_48]

@Ceiling Cat - what are the 20, 50 and 200 moving averages? I have been slowly learning this stuff and am keen on learning more.

Its like 1+2+3+4 = 10

10 / 4 = 2.5

20 Day Moving Average = (20 x 2.5) 50
50 Day =. 125
200 Day = 250

The 200 Day will be so much faster and it will be on top of the other "2 lines(lagging lines)" during a peak and at the bottom during a correction.

They will CROSS EACH other and some people use those signal as to buy or sell, long or short. This doesn't mean shit. Just think of it as a way of communicating with market makers or other bears or bulls when to take the best entry positions. (MARKET MAKERS BEING HIGH FREQUENCY TRADING BOTS)

They can be irrational as they want so yeah, tread lightly. Save a lot of cash to hedge and buy dips, you'll know the dips when the current price is way under the 20 day moving average (Lagging Line)

Sell at the peaks when price is way above the 200 Day moving average or somewhere in betweek (175 to 215)






FOR BEGINNERS, I SUGGEST TO TRAIN YOUR DISCIPLINE LEARNING ICHIMOKU CLOUDS.

 

[enricotheman]

It's like a different language

 

[Ceiling Cat]

It's like a different language

The simple explanation of 20, 50 and 200 day moving averages :

A moving average is exactly that, the average price of a stock over a certain time period. The 20, 50, 200 day periods are most commonly used. If a stock chart has the 20 day price above the 50 day and the 50 day above the 200 day price this indicated a healthy stock. If a longer period of moving average is on top of a shorter period than this is an indication that a stock has had a period growth has slowed. One indicator many investors use is called a Death Cross, this is when the 50 day moving average moves below the 200 day moving average. When this happens it is an indication that the stock is in a downward price trend. When the 50 day moving average is below the 200 day moving average and crosses back above this is called a Golden Cross and is an indication that prices are in an upward trend. Moving averages can be useful to determine if a stock is in a downward or upward trend.

To see the moving averages of a stock :

- Go to Yahoo finance and enter the name of your stock.
- At the upper right hand of the chart/graph click on Full Screen
- At the upper left hand of the chart click on Indicators, then Moving Averages.
- Enter your 20, 50 and 200 day moving averages.

Above is a chart of Canadian Tire A shares. ( Green line 20 day moving average, red line 50 day moving average and black line 200 day moving average )

A ) Moving averages indicate a healthy stock. 20 MA above the 50 MA and 50 MA above the 200 MA.
B ) The 20 MA moves below the 50 MA and the price dips correspondingly.
C ) The 20 MA moving back above the 50 day MA, this can be an indication of a rise in price.
D ) Volume is a good indicator of price increase or decrease.

* Technical analysis indicators that can give you a good idea of the price direction but are not fool proof. A person that has mastered technical indicators can pick profitable stocks 90% of the time in a shorter period, where as a person that is less equipped may be profitable 60% of the time over a longer period.

This video is one of many you can find on technical indicators on Youtube.

 

[Sonic Temple]

@Rukos_48 and @Ceiling Cat thanks for all the info - will now take the time to digest this - this is awesome.

 

[Rukos_48]

Yeah, it's really useful for day trading. I stole the concept from forex traders. This is pure technical. The fundamentals will beat any chart analysis anytime.

I forgot to mention that that 1 + 2 + 3 + 4 represents the different prices in "4 different unit price"

 

[|2 /-\ | /|/]

Can’t go wrong with this method