Category: Blog

Stock trading tips and explanations for Most Excellent Investor members area.

Posted on

Profitability and Relevance of Stock Market Financial News

Financial market news can be overwhelming to follow. Especially if you are not familiar with the terminology being used. This article has been created to help you understand the basics of financial market news and why it matters in stock trading.

The first thing you need to understand is that the financial stock market is a 24-hour global market. This means that stock prices are always changing. News that happens during the day in the United States will have an impact on the stock prices in Asia and Europe.

The second thing you need to understand is that there are two types of financial market news - fundamental and technical. Fundamental news is based on the underlying economic factors that affect a company, such as earnings, revenue, and dividends. Technical news is based on the charts and patterns of a company's stock price.

The third thing you need to understand is that financial market news can be positive or negative. Positive news will cause the stock prices to go up, while negative news will cause the stock prices to go down.

The fourth thing you need to understand is that there are two types of financial news - current and future. Current news is information that has already happened, while future news is information that has not yet happened.

The fifth thing you need to understand is that financial market news is released by different types of sources. These sources can be divided into three categories - financial institutions, media, and analysts.

Financial institutions are the largest sources of financial market news. They include banks, brokerages, and credit rating agencies. Media sources are the next largest source of financial market news. They include newspapers, magazines, and television networks. Finally, analysts are the smallest source of financial market news. They are independent research firms that provide analysis of a company's financial statements.

Now that you understand the basics of financial market news, you can start to follow the market and make informed investment decisions.

Posted on

Unveiling the Stock Market OBV Formula As a Valuable Volume Indicator for Traders

In the realm of stock market analysis, traders and investors rely on various indicators to gain insights into market trends and potential price movements. One such indicator is the On-Balance Volume (OBV), which measures the cumulative volume flow in relation to a stock's price. Understanding the OBV formula is essential for harnessing the power of this volume indicator. In this article, we will delve into the OBV formula, step by step, and explore its significance in the stock market.

The OBV Formula:

The On-Balance Volume (OBV) formula calculates a running total of volume based on the changes in the stock's price. The general OBV formula can be broken down into the following steps:

Step 1: Assign an initial value:

Start by assigning an initial value to the OBV, usually set as zero.

Step 2: Compare current closing price with the previous closing price:

Compare the current day's closing price with the previous day's closing price. This comparison helps determine the stock's direction and influences the OBV calculation.

Step 3: Determine the OBV value:

If the current closing price is higher than the previous day's closing price, add the volume for that day to the OBV.

If the current closing price is lower than the previous day's closing price, subtract the volume for that day from the OBV.

If the current closing price is the same as the previous day's closing price, the OBV remains unchanged.

Step 4: Calculate the cumulative OBV:

Continue this process for each subsequent day, updating the OBV value based on the comparison between closing prices. The cumulative OBV provides a running total, reflecting the overall volume flow in relation to the stock's price movements.

Understanding the OBV Formula:

The OBV formula's objective is to track the relationship between volume and price changes. It assumes that volume precedes price movement, and changes in volume can indicate the strength or weakness of a stock's price trend.

When the OBV is rising, it suggests that the volume on days with price increases is outweighing the volume on days with price decreases. This indicates positive buying pressure and confirms the upward price trend.

Conversely, when the OBV is falling, it indicates that the volume on days with price decreases is greater than the volume on days with price increases. This suggests negative selling pressure and confirms the downward price trend.

The OBV formula helps identify potential trend reversals or confirm existing trends. Divergence between the OBV and the stock's price can signal a change in momentum, indicating a potential shift in the price trend.

Limitations of OBV:

While the OBV is a valuable volume indicator, it also has some limitations. It may not be as effective in markets with low volume or when significant news events cause abnormal volume spikes. Additionally, the OBV does not provide information about the magnitude of price movements; it focuses solely on the relationship between volume and price direction.

Conclusion:

The OBV formula is a valuable tool for traders and investors seeking insights into volume trends and potential price reversals. By analyzing the cumulative volume flow in relation to a stock's price changes, the OBV provides indications of buying and selling pressure. Understanding the OBV formula empowers market participants to make more informed trading decisions and identify potential entry or exit points. However, it is important to use the OBV in conjunction with other technical indicators and fundamental analysis to gain a comprehensive understanding of a stock's overall health.

Posted on

The Old Reasons Why Stock Market Timing is Not a Recommended Investment Strategy

Timing the stock market is a popular but highly challenging investment strategy that involves attempting to buy and sell stocks based on predictions of short-term market movements. While the allure of maximizing gains and avoiding losses may seem tempting, market timing is generally not recommended as a reliable investment strategy. In this article, we will explore seven reasons why market timing is often considered risky and provide insights into alternative approaches for long-term investors.

1. Uncertain Market Movements:

Attempting to accurately predict short-term market movements is extremely difficult, if not impossible, even for experienced professionals. The stock market is influenced by a multitude of factors, including economic indicators, geopolitical events, company news, and investor sentiment. These variables make it challenging to consistently time market entry and exit points with precision.

2. Emotional Decision-Making:

Market timing often leads to emotional decision-making, which can be detrimental to investment success. Fear and greed are common emotions that drive investors to make impulsive decisions based on short-term market fluctuations. Emotional reactions can cloud judgment and cause investors to buy at market peaks or sell during downturns, potentially missing out on long-term gains.

3. High Transaction Costs:

Frequent buying and selling of stocks incur transaction costs, such as brokerage fees and taxes, which can significantly erode potential returns. Market timers tend to engage in more trades than long-term investors, increasing their exposure to these costs. Over time, these expenses can erode the gains and reduce overall portfolio performance.

4. Missing Out on Market Upswings:

Timing the market successfully not only requires selling at market peaks but also accurately identifying the optimal time to reinvest. Missing out on the best-performing days in the market can have a significant impact on long-term investment returns. Studies have shown that investors who try to time the market often miss these crucial upswings, resulting in diminished overall performance.

5. Long-Term Investing Benefits:

Rather than attempting to time the market, adopting a long-term investment strategy has historically yielded more favorable results. By investing in a diversified portfolio of quality stocks and holding them for the long run, investors can benefit from the power of compounding returns and weather short-term market volatility.

6. Time in the Market, Not Timing the Market:

The adage "time in the market, not timing the market" emphasizes the importance of staying invested and maintaining a long-term perspective. Over extended periods, the stock market has demonstrated an upward trajectory, despite short-term fluctuations. Investors who remain committed to their investments through market cycles have historically been rewarded for their patience.

7. Strategic Asset Allocation:

Rather than attempting to time individual stocks or the overall market, a recommended approach is strategic asset allocation. This involves diversifying investments across different asset classes, such as stocks, bonds, and cash, based on individual risk tolerance and investment goals. Regular rebalancing of the portfolio ensures alignment with long-term objectives.

In conclusion, while market timing may hold a certain allure, it is generally not a recommended investment strategy. Conventional studies that discourage market timing use the following as proof not to do it. The unpredictable nature of the stock market, emotional decision-making, high transaction costs, and the potential to miss out on market upswings make it a risky approach. Long-term investing, strategic asset allocation, and maintaining a disciplined investment strategy have proven to be more reliable methods for achieving financial goals. By focusing on a long-term perspective and avoiding the temptation to time the market, investors can position themselves for greater success and navigate the ups and downs of the stock market with confidence.

But for every danger listed as reasons not to time the market there are beneficial opportunities that successful market timing can bring. Look to a future article on the benefits that diligent market timing can bring.

Posted on

Understanding the Stock Market RSI Formula as a Key Indicator for Investors

The Relative Strength Index (RSI) is a widely used technical indicator that provides valuable insights into a stock's price momentum and potential trend reversals. Understanding the RSI formula is crucial for investors looking to utilize this powerful tool effectively. In this article, we will explore the RSI formula, step by step, and explain its significance in the stock market.

The RSI Formula

The RSI formula calculates the relative strength of a stock by comparing the average gains and losses over a specified period. The general RSI formula can be broken down into the following steps:

Step 1: Determine the period for calculation:

The RSI calculation typically uses a 14-day period, although other time frames can be employed based on personal preference and trading strategies. This period represents the number of trading days considered when analyzing the stock's price movements.

Step 2: Calculate the average gain and average loss:

To calculate the average gain and average loss, you need to sum up the gains and losses over the selected period and divide them by the number of periods. The formula is as follows:

Average Gain = (Sum of Gains over the Period) / Number of Periods

Average Loss = (Sum of Losses over the Period) / Number of Periods

Step 3: Calculate the relative strength (RS):

The relative strength (RS) compares the average gain to the average loss using the following formula:

RS = Average Gain / Average Loss

Step 4: Calculate the RSI:

The RSI is derived from the relative strength (RS) and is represented as a value ranging from 0 to 100. To calculate the RSI, the following formula is used:

RSI = 100 - (100 / (1 + RS))

Understanding the RSI Formula

The RSI formula is based on the concept that stock prices tend to have momentum and move in trends. The formula compares the magnitude of recent gains to recent losses to assess the stock's strength or weakness.

When the RSI value is above 70, it suggests that the stock is overbought and may be due for a price correction or reversal. On the other hand, when the RSI value falls below 30, it indicates that the stock is oversold and may experience a potential upward price movement.

The RSI formula's calculations help smooth out price fluctuations and provide a clear indicator of a stock's strength relative to its recent performance. It helps traders and investors identify potential entry or exit points and assists in determining the overall market sentiment for a particular stock.

Limitations of RSI

While the RSI is a valuable indicator, it does have certain limitations. It is primarily a short- to medium-term indicator and may not be as effective in identifying long-term trends. Additionally, RSI calculations can be distorted during periods of high volatility or when a stock is experiencing significant news events that impact its price.

Conclusion

The RSI formula is an essential tool for investors seeking to gauge a stock's price momentum and potential trend reversals. By analyzing the average gains and losses over a specified period, the RSI provides valuable insights into a stock's relative strength. Understanding the RSI formula allows investors to interpret RSI values and make more informed trading decisions. However, it is important to combine RSI analysis with other technical indicators and fundamental analysis to form a comprehensive investment strategy.

Posted on

The Value of RSI in the Stock Market: A Powerful Indicator for Investors

In the fast-paced world of the stock market, investors constantly search for tools and indicators that can help them make informed decisions. One such tool is the Relative Strength Index (RSI), a popular and valuable technical indicator. The RSI provides insights into a stock's price momentum and helps investors identify potential buy or sell signals. In this article, we will explore the value of RSI in the stock market and how investors can leverage its power.

Understanding RSI

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It compares the magnitude of recent gains and losses over a specified period, typically 14 trading days, and displays the results on a scale of 0 to 100. RSI values above 70 indicate overbought conditions, suggesting a potential price reversal or correction, while values below 30 indicate oversold conditions, indicating a possible upward price movement.

Key Benefits

Identifying Overbought and Oversold Levels: RSI helps investors identify extreme price conditions. When the RSI reaches or exceeds the 70 level, it suggests that the stock may be overbought and due for a downward correction. Conversely, an RSI value below 30 suggests that the stock may be oversold and could experience a rebound in the near future. These overbought and oversold levels can assist in timing entry or exit points.

Confirmation of Price Trends: RSI can confirm the strength and sustainability of a price trend. When the RSI moves in the same direction as the stock price, it confirms the prevailing trend. If a stock is in an uptrend and the RSI is consistently making higher highs, it indicates strong bullish momentum. Conversely, if a stock is in a downtrend and the RSI is consistently making lower lows, it confirms bearish momentum.

Divergence Patterns: RSI can help identify potential trend reversals through divergence patterns. Bullish divergence occurs when the stock price makes a lower low while the RSI forms a higher low, indicating weakening selling pressure and a possible upward reversal. Conversely, bearish divergence occurs when the stock price makes a higher high while the RSI forms a lower high, suggesting waning buying pressure and a potential downward reversal. These patterns can provide early indications of a trend change.

Confirmation with Support and Resistance Levels: RSI can be used in conjunction with support and resistance levels to validate potential breakout or breakdown scenarios. When a stock breaks above a resistance level with the RSI in overbought territory, it suggests a strong bullish signal. Similarly, if a stock breaks below a support level with the RSI in oversold territory, it strengthens the bearish signal.

Strategies for Using RSI

RSI Divergence Trading: Look for bullish or bearish divergence patterns on the RSI chart to anticipate trend reversals. Combine this information with other technical indicators and confirmatory signals for stronger trade decisions.

Overbought and Oversold Levels: Utilize RSI levels above 70 as potential sell signals and levels below 30 as potential buy signals. However, it's important to note that stocks can remain overbought or oversold for extended periods, so it's advisable to use RSI in conjunction with other indicators for confirmation.

RSI and Trend Confirmation: Use RSI to confirm the strength of an existing trend. When the RSI aligns with the prevailing price trend, it provides additional confidence in the direction of the market.

Combine RSI with Support and Resistance: Combine RSI analysis with key support and resistance levels to validate potential breakout or breakdown scenarios. This approach helps confirm the validity of technical patterns and enhances decision-making.

The Relative Strength Index (RSI) is a powerful and versatile technical indicator that can assist investors in making informed decisions in the stock market. By providing insights into overbought and oversold levels, confirming price trends, and identifying divergence patterns, the RSI adds value to investors' analysis. However, like any tool, it should be used in conjunction with other indicators and thorough research to make well-rounded investment choices. With proper understanding and implementation, the RSI can be an invaluable asset in an investor's toolkit.

Posted on

How Accumulation and Distribution Affect Stock Prices

Since stock market prices fluctuate on phases of supply and demand investors can trade securities to capitalize on these market price movements. Informed investment decisions based on precise price movements depend on understanding the concepts of accumulation and distribution. These phases of market behavior can help investors identify potential trends and make strategic moves to make a profit. In this article, we will identify what accumulation and distribution, explore their significance, and suggest strategies for using them to individual investor advantage.

Identifying Accumulation

Accumulation refers to a phase in the market cycle when institutional investors, such as mutual funds, pension funds, and hedge funds, begin accumulating stocks or other securities. During this phase, informed market participants believe that the prices of certain stocks are undervalued or have the potential for future growth.

Accumulation can occur after a prolonged downtrend, when investors see an opportunity for a potential reversal. Institutions and savvy investors accumulate stocks during this phase, gradually increasing their holdings. Their actions create demand, leading to a steady rise in prices.

Key Indicators of Accumulation

Volume - Increasing trading volume is often a strong indicator of accumulation. Higher volume suggests increased market participation, signaling institutional buying.

Price Stability - During accumulation, prices tend to stabilize or form a base, indicating that buyers are supporting the stock at a certain level. This consolidation phase often precedes a potential upward move.

Positive News Flow - Accumulation is often accompanied by positive news or events that suggest the stock's potential growth. These catalysts can attract institutional interest and encourage buying activity.

Strategies for Accumulation

Identify Fundamental Value - Conduct thorough fundamental analysis to identify undervalued stocks with strong growth potential. Look for companies with solid financials, a competitive advantage, and a positive outlook for the industry.

Technical Analysis - Utilize technical indicators and chart patterns to identify accumulation phases. Look for consolidating price patterns, increasing volume, and signs of buying pressure.

Patience and Gradual Buying - Accumulation is a patient strategy. Gradually build your position over time, taking advantage of price dips and consolidation periods. This approach minimizes the impact of short-term market fluctuations.

Identifying Distribution

Distribution is the opposite of accumulation and occurs when institutional investors begin to sell their holdings. It typically happens after a prolonged uptrend, when investors believe that a stock is overvalued or when they anticipate a market decline.

During distribution, institutions and informed investors gradually sell their positions, creating selling pressure and reducing demand. This can lead to a decline in stock prices.

Key Indicators of Distribution

Volume - Increasing trading volume during a downtrend suggests distribution. Higher volume indicates a surge in selling pressure and signals that institutions are offloading their holdings.

Price Weakness - Stocks experiencing distribution tend to exhibit weak price action, with lower highs and lower lows. This indicates a loss of buying interest and the potential for a downward trend.

Negative News Flow - Negative news, disappointing earnings reports, or adverse events can trigger distribution. Institutions may use such catalysts as opportunities to sell their positions.

Strategies for Distribution

Set Price Targets - Establish realistic price targets for your investments based on fundamental and technical analysis. Consider selling when the stock reaches your target or shows signs of weakness.

Trailing Stops - Utilize trailing stop orders to protect profits during distribution phases. These orders automatically adjust the sell price based on the stock's performance, allowing you to capture gains while limiting potential losses.

Diversify Your Portfolio: Spread your investments across different sectors and asset classes. Diversification helps mitigate the impact of a single stock's distribution on your overall portfolio performance.

Bottom Line

Accumulation and distribution are integral phases of the stock market cycle that can provide valuable insights into the actions of big smart money stock investors and potentially help individual traders move in conjunction with the smart money that is moving the market. Quick identification of stocks being accumulated or distributed is key to maximizing profits. Most Excellent investor members have access to watchlists made up of stocks in both phases aggregated so that quick decision making can occur for buying or selling.  Sign up now.

Posted on

Understanding Stock Market Accumulation and Distribution

The stock market is a dynamic ecosystem where prices fluctuate based on the forces of supply and demand. To navigate this complex landscape, investors employ various strategies to maximize their returns. Two crucial concepts in stock market analysis are accumulation and distribution. These terms describe the actions of institutional investors and provide valuable insights for individual traders. In this article, we will delve into the meaning of accumulation and distribution, explore the indicators used to identify these phases, and discuss strategies investors can adopt to capitalize on them.

What is Accumulation?

Accumulation refers to the phase in which large institutional investors, such as mutual funds, hedge funds, and pension funds, are actively buying shares of a particular stock or asset. During this phase, the demand for the stock exceeds the supply, leading to an upward price trend. Accumulation often occurs after a period of decline or consolidation when smart money investors perceive the stock to be undervalued.

Identifying Accumulation

Several indicators can help identify the accumulation phase. One common indicator is the volume, which measures the number of shares traded in a given period. In an accumulation phase, trading volume tends to increase, reflecting the higher activity of institutional investors entering the market. Additionally, technical analysis tools like the on-balance volume (OBV) indicator can help detect accumulation. The OBV measures the cumulative volume flow in a stock, and when it rises, it suggests increased buying pressure, signaling accumulation.

Strategies for Accumulation

For individual investors, identifying accumulation can present an opportunity to align their positions with institutional investors and potentially benefit from the price appreciation. Some strategies to consider during the accumulation phase include:

Trend Confirmation: Confirming the stock's upward trend through technical analysis can help investors validate the accumulation phase. Tools like moving averages or trend lines can provide insights into the stock's overall direction.

Breakout Trading: Once the accumulation phase is confirmed, investors may look for breakouts, which occur when the stock's price surpasses a resistance level. Breakouts can signal a potential continuation of the upward trend and provide entry points for traders.

What is Distribution?

Distribution is the opposite of accumulation and occurs when institutional investors start selling their shares. This phase typically follows a prolonged uptrend in the stock's price, as institutions capitalize on their gains. As the supply of shares exceeds demand, the stock's price may start to decline.

Identifying Distribution

Similar to accumulation, identifying the distribution phase relies on various indicators. Increased trading volume, particularly when accompanied by declining prices, can indicate that institutional investors are offloading their positions. Technical analysis tools like the relative strength index (RSI) can also help identify overbought conditions, suggesting a potential distribution phase.

Strategies for Distribution

Investors should exercise caution during the distribution phase, as the stock's price is likely to decline. Strategies to consider during this phase include:

Trend Reversal Confirmation: Confirming the stock's reversal through technical analysis can help investors avoid further losses. Tools like trend lines, moving averages, or chart patterns can help identify potential trend reversals.

Short Selling: Sophisticated traders may consider short selling during the distribution phase. Short selling involves borrowing shares from a broker and selling them with the expectation of buying them back at a lower price in the future. This strategy allows traders to profit from a declining stock price.

Conclusion

Understanding stock market accumulation and distribution is essential for investors looking to make informed decisions. Identifying these phases can provide valuable insights into the actions of institutional investors and potentially help individual traders align their positions with smart money. By utilizing technical analysis tools and following appropriate strategies, investors can increase their chances of capitalizing on the opportunities presented during the accumulation and distribution phases.

Posted on

Make Stock Market Volatility Work for You

How To Make Stock Market Volatility Work for You?

Stock day traders actually want stock market prices to make big moves. A stagnant market where prices don't move or move in very small increments means that money invested in such a market is "dead money".

When stock prices are volatile even a stock with a price that ends down from the prior day can make winning moves during the current trading day (intraday) before ending down at the end of the day. An investor buying a stock close to its intraday low and then selling it after the price rises intraday can make a profit. The trick is finding stocks with such a trade set up.

What are the characteristics of a profitable intraday stock?

Volatility over multiple days backed by sufficient volume that shows there is trader interest in the stock. The volatility has to be over multiple trading days with moderate to big price movement taking place during each trading day. The research to find such stocks is already done for you on the watchlists in the Most Excellent Investor membership area.

The psychology needed to trade a volatile market?

Even after finding volatile stocks that meet the criteria for volume a trader needs to have the "guts" to buy into a stock position and hold that position long enough for the price to rise during the trading day. Because after buying a stock at what can be considered a comparatively low price that price can drift even lower before rising above the purchase price. Check out the case study of the stock below from March 23, 2022.

Case study profitable intraday winning stock: Lizhi Inc. (LIZI)

Make stock market volatility work for you
Intraday winning chart for end of day losing stock

Buying stock symbol LIZI at 9:34 AM on March 23, 2922 for $1.78 would earn a profit of between 1.8% - 9.5% if sold anytime between 9:38 AM and 11:56 AM. A profit of between 3.5% and 8.4% could be made if the position was closed (sold) anytime after 11:56 AM.

Every day there are dozens, if not hundreds, of stocks that trade with sufficient volatility like the case study shown above. With proper stock research and trader mentality a volatile market will make opportunity for big profits!

Posted on

Combat Stock Trading Company Limitations That Anger Investors

What happens when an investor sets up a profitable trading strategy but the trading company platform (think Robinhood) limits functionality (trading options) for the particular stock being traded? A potentially profitable trading strategy can lose money because volume is an important part of the trade set up and if purchasing of shares is being limited by the trading platform then entering and exiting a trade is hindered before a profit can be taken. As the saying goes, you make money when you buy so the decision to buy and the amount of shares to buy is key.

Recently when the idea of trading shares of GameStop  (GME) went viral it caused so much volatility that some trading platforms like Robinhood placed limits on trading the stock. That angered investors trading on Robinhood due to the fact that a sufficient amount of shares in GME could not be bought that would allow for sufficient profit in the intraday price moves that the stock made. How can traders combat such moves made by stock trading company platforms?

The best way of combating limits placed on trading in specific stocks is to find another stock to trade. Too simplistic? Not hardly. There are thousands of stocks that trade on the U.S. stock exchanges everyday. Many stock traders and investor focus on the price movement of the 30 stocks in DOW. But the DOW Jones stocks are only representative of their respective sectors not of every stock in the sector. If the market (DJIA) is down for a given trading day there are many individual stocks, dozens at minimum, in the broader market that are up for the day.  The same is true for sectors that may be down, there can still be stocks within the sector that are up for the day. The key is to find one of these stocks and trade it.

When a stock receives unexpected interest from a lot of investors, whether retail or professional ones, the volume created in trading it can overwhelm a trading platform used to trade the stock's shares. Clearing all the trades (which is a different subject for a different article) can be problematic for a trading company since the amount of floating shares for the volatile stock may be limited. This may cause a problem for a trading company with limited shares to obtain shares for all investors who wish to purchase them.

Stock traders and investors want to be able to readily buy and sell stocks that are making big price moves so that a profit can be captured quickly. If everyone is limiting their attention to trading the same stock then share availability may be impacted and limitations by trading companies will result.

Since the US stock markets are the most liquid in the world there are always opportunities to be made outside of the viral stocks being traded. Profitable intraday trading happened for more stocks than GameStop when it was red hot. The way to combat the limitations were placed on GameStop, and other stocks, with limitations,  is to find highly traded and profitable stocks that don't have limitations placed on them. There are respectable stock research sites (like this one) that can help you identify stocks with high interest (measured in volume) along with volatility (measured in price movement). Trading in diversified profitable stocks that don't have limitations (yet) allow for quick profits  to be made smoothly.  Happy trading!

Posted on

Determine Where You Will Invest, Is It Easy Or Hard?

What To Invest In

There are several different types of investments, stock market,  real estate, artwork, and there are many factors in determining where you should invest your funds.

Determining where you will invest begins with researching such things as, the various available types of investments, determining your risk tolerance, and determining your investment style – and your financial goals. The most liquid and diverse place to invest in is the stock market.

Stock Research Importance

If you were purchasing a new car, you would do quite a bit of research before making a final decision on your purchase. You would never purchase a car that you hadn't fully investigated and taken for a test drive. Similarly, investing in stocks works much the same way.

Learning about the stock market and the individual stocks in it takes a lot of time… time well spent of course. There are numerous books and websites on the topic, and you can even take college level courses on the topic – which is what stock brokers do.

Stock Research Shortcut

Does researching stocks have to be time consuming? With access to the Internet, you can actually research stocks, play the stock market with fake money to get a feel for how trading works and see if you can make money at it.

You can make pretend investments by searching for ‘Stock Market Games’ or ‘Stock Market Simulations.’ on any search engine. But how do you choose which stocks to "play with"?  You can fake trade but you can't fake research. Or can you?

No you can't use fake research to trade stocks, but you can take a shortcut. Let someone else do the research for you. That's how financial analysts and consultants make their money. But rather than interview or research analysts you probably would rather spend your time researching stocks you can buy.  A better shortcut is to use stock research already distilled into a list of the stocks that seem most promising based on the research already done by others.

Stock Watch Lists

Stock watch lists is what this website compiles for its members to refer to when they are buying and selling stocks. If you want to be an independent investor you will want to pull the trigger on your own trades and buy and sell according to your own preferences and tolerances for price movement.

Check out the watch lists in our member's area. Buy the stocks listed at the approximate time shown on the watch list and sell when the price rises to a point where you make the profit you desire, then sell the stock. For stock day traders this buying and selling can take place multiple times throughout the trading day, with the same stock or with different stocks. Financial planners don't recommend this type of investing because there is the danger of inexperienced traders losing money instead of making money.

If day trading stocks is too much risk for you then you should speak with a financial planner. Tell him or her your goals, and ask for their suggestions – this is after all what they do! A good financial planner can help you determine where to invest your funds, and help you set up a plan to reach all of your financial goals. Many will even teach you about investing along the way.

For just a dollar you can try using our watch lists produced daily for each hour of the trading day to pick stocks you want to trade. You'll have time to "paper trade" (fake trade) using one of the simulators you can find as mentioned previously in this article. Quite quickly, and cheaply, you can see whether day trading stocks using our watch lists will work for you.