HOW TO PROFIT FROM STOCK PICKING

Stock picking is the determinant factor for success as a stock Investor. This process is not as easy as one thinks. High performance stocks are usually difficult to select as it requires expertise, technical know-how and experience for someone to really dig them out from the lots .Although Investors have several methods of stock picking. It is advised that it is wise to follow a laid down procedures to curtail risk of investment.

The basic procedures are highlighted as follows:

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• Evaluate the Time frame and Strategies of the Investment as it dictate the type of stocks you buy. For a long term Investment you need to buy stocks that have sustainable competitive advantages along with stable growth. The way to find out about these stocks is to research the historical performance of these stocks years back and carry out SWOT analysis on the Company.

  However, choosing a short term investment involves employing any one of these strategies-

  a)Momentum Trading: This means is to find out stocks that have consistently witnessed a boom in both prices and volume over the past years.

  b)Contrarian Strategy: This is has to do with resiliency of Company stock not drop as a result of mishap. For instance there are cases where the stock drops by 20% after a company experienced a turbulent times .It is advised that one needs to find a list of stocks that have declined in prices recently ,study the potential for reversal(via candlestick analysis). If it showed candlestick reversal, dig out the news to analyze the causative agents to see if there are over-sold opportunities.

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• Research about Stocks and stock screeners online that tailor to your needs and time frame.
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• From the available stocks listed, you are advised to choose wisely and diversify using Markowitz analysis pattern. This will help you distribute money wisely to each of the stocks. The advantage is that it gives you greatest reward and reduces risk.

The listed steps above will propel you forward in making money from the stock market if you make up your mind to follow the above guidelines. Take opportunity in stock trading business today.