Advice on stock picking system please.
Post Number: 18
|Wednesday, June 16, 2010 - 06:04 pm:||
I have been paper trading for a couple of months now and I was wondering whether anyone could suggest an easy way to pick shares, either with strength (long) or weakness (short)?
It would be a bonus if the share picking systems suggested considered some basic fundamentals.
I know you need to spend money to make money, but if the system involved the use of free or at least reasonably priced methods – that would be the greatest bonus of all!
For example, just browsing through some Youtube videos I found an example where a guy uses the U.S. version of Etrade’s CLEAR STATION site (which is free to join but which only sorts through U.S. stocks):
He is able to quickly (and for free) pick stocks which:
1. Have just had a record price breakout
2. Have done so on increased volume
3. Have a P/E ratio which is below the average for the industry group.
This system also has the benefit of being able to click a “bulk charts” link which brings up largish thumbnails of charts of the chosen stocks, all on the same page. You can then quickly scan for stocks which suit your personal, technical setup.
Another video has a guy using Google Finance to help pick stocks (again, only U.S. stocks):
Here, stocks are chosen (quickly and for free) which fit the following criteria:
1. Have had at least a 100% 52 week price change
2. Have a minimum last price of at least $10 and a maximum of $50 (less volatility)
3. Have a minimum average volume of 200,000 shares
So, I guess I was wondering whether anyone had a setup like this for the Australian market, which may or may not consider basic fundamentals, but which is free (or at least not prohibitively expensive)?
Thanks a lot.
Post Number: 663
|Wednesday, June 16, 2010 - 09:54 pm:||
We have no idea of your timeframe, ie how long you will hold a stock. This site is mostly populated by short and medium term traders, with some long term investors.
Some general comments -
If there is a good system and its free it won't work for long, as it will be too hard to get into and shortsellers will short the original rise. There is no free lunch.
Trade in the direction of the trend. Easy to say, but identifying the trend at various timeframes is what many of us spend a lot of time doing. It's not just the trend of the stock you are considering but that of the index also.
It's not a good time to be long for the long term at the moment. If you have shorter timeframes it might be ok.
Having a systematic exit for all stocks based on the index changing trend is important.