Picking Stocks For Tomorrow Using Japanese Candlesticks Today
When picking stocks, your energy and time are better spent not worrying about the big ones that got away. Instead, the best investment advice I can give you is to use these two important personal commodities to find tomorrow's winning stock picks.
If you are looking for individual sectors or stocks as investment options, start by thinking about what people are going to need more of in the near future and try picking stocks of companies that are leaders or trying to become leaders in those areas.
Some investors don't want to mess with their portfolios and just want to try a small short-term gamble on something. This is perfectly OK, and probably prudent. The important thing is to know the difference between long term investing and short term investing because your stock picking goals with the two will probably be different.
A short-term speculative play with a loss of 10% might be too much of a loss because the idea of these plays is to get in and out very quickly because of stock volatility. And if you take hits of 30% to 40%, it won't be long before your speculative capital is gone. Your long-term investments could probably survive a 20% drop in value if you are holding them for over 10 years.
Today is the time to think about the next big market downtrend because successful traders know it has to hit sooner or later. Some of the big name growth stocks may seem too high today, but for whatever reason, if they begin to head lower you should start to consider at what price level you would enter them and commit to buying them.
And remember that some people cannot make investment decisions because they think they can never do enough fundamental and technical analysis research in order to be confident about picking stocks. Face reality, we can never be absolutely sure of our stock picks because all of our investments involve some element of chance, greed and fear.
As long as you don't put your entire stock trading plan in jeopardy, you may want to occasionally try picking stocks based on one of your hunches. Many times your instincts are right and when they are not, you can use this knowledge to learn how to invest better and make wiser stock picking decisions in the future.