One of the common difficulties in investing for dummies is how to pick a stock. This can be a very straight forward decision if the beginner just follows so-called “stock tips” from his friends. Unfortunately, majority of this stock picking method will lead a beginner to two situation; either sell the stock with price lower than cost or hold the stock for many years.

To minimize the risk of the investment, it is highly recommended to follow the guidance in trading courses. Click here to discover how to find good stock trading courses. Below are basic steps for beginners as reference in picking high performance stocks.

First of all, plan your investment budget and investing time period either long term or short term as this will determine which categories of stocks suit to your investment. Normally, bluechips are common choice for long term investment.

If you aggressive investor and prefer short term investment, then you are advisable to do technical analysis of stock trends by using candlestick chart. Click the link to further study why Japanese candlestick charting is highly recommended.

Off course it is not possible to do all the technical analysis for all stocks. You can study the stock trends on those stocks which drop in prices recently. Beside the candlestick chart, it is suggested to conduct researches on the stocks list to find out whether market is over-reacted towards the news about the stock, for instance the company win a legal case or it just lose a project.

Last but not lease, be patient in stock picking. It is not recommended to pick a stock based on intra-day data which may lead to wrong judgment as stock price variation within the course of any trading day. So, always spend time on study the company background and its recent news conjunction with the technical analysis of stock trends in good stock picking.

Tagged with: • •