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How do you select stocks to buy?

Discussion in 'Ask any question!' started by Bruce Wright, Dec 23, 2018.

  1. Bruce Wright

    Bruce Wright New Member

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    How do you select stocks to buy?
     
  2. Three Eyes

    Three Eyes 2018 Stockaholics Contest Winner

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    This is a very personal question with very personal responses...one size does not fit all. You have to know your goals, your risk tolerance, etc.

    For me and my own situation, the question isn't how I select stocks to buy, but rather how I become aware of stocks in the first place. For that, I run screens, follow a handful of investment websites (like Stockaholics), and click on occasional business headlines on Yahoo or Google News. Once a stock becomes interesting to me, only THEN do I begin formulate what I want to do with it (buy it outright, hedge it with collars, play options only, and so on).
     
    bigbear0083 likes this.
  3. JerryM

    JerryM Well-Known Member

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    Bruce, As mentioned above there is no one answer to how to select stocks. If you are planning on being active and managing your own holdings then you need to get some basics down. You need to decide on what strategy or combinations of strategies you will use. Start out with this thread and open that shared notebook. Check out the strategies section to see what I am talking about. Selection of stocks will be screened from the different criteria that makes up a growth, value or income stock etc.

    https://www.stockaholics.net/threads/basic-training-through-investopedia.4084/page-2

    Also, if you are in this daily going the Discord chat listed in the top menu bar of this page.
     
    bigbear0083 likes this.
  4. Steven_Burt

    Steven_Burt Well-Known Member

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    The first question imo is how long do you plan to hold? If you are making a day trade fundamentals mean very little, and you should be focusing on technicals. Short term trades require a little of both and long term "investing" is absolutely fundamental based on choosing stocks and technical based for entries.
     
    bigbear0083 likes this.
  5. Onepoint272

    Onepoint272 Well-Known Member

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    I refuse to consider fundamentals even for long term speculation. Generally this is my selection process:

    Determine the short-, intermediate-, and long-term trends of the overall market
    • by inspection of the S&P 500
    • by my position sheet of 60 leading stocks representing 12 industry groups
    Select strongest industry groups using comparative relative strength of the leaders versus the S&P 500

    Select the strongest stocks in those industry groups compared to the leaders of the group

    Determine the term of the trend for the selected trade
    • Short term (days to weeks)
    • Intermediate term (weeks to months)
    • Long term (months to years)
    Take a long position:
    1. at the end of an accumulation trading range on a:
      1. Spring
      2. Secondary test
      3. Last Point of Support
    2. during an uptrend on:
      1. a successful test of an uptrend support line
    Buying Tests for taking position at end of an accumulation trading range

    _____ 1. Objective accomplished to the downside (based on point & figure price objective)

    _____ 2. Preliminary Support and/or Selling Climax evident

    _____ 3. Base forming

    _____ 4. Downtrend broken

    _____ 5. Activity bullish, volume increasing on rallies & decreasing on reactions

    _____ 6. Ending action (spring, secondary test, last point of support)
     
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