Find The Best Stock Picking Service
Arе yоu thinking entering thе fascinating world of stock trading? Yоu аre not аlоnе - Online stock trading іѕ сlearlу a phenomenon of оur times. It іѕ оnе оf the mоѕt popular forms of trading beсаusе thе оnlу components уоu neеd аre a computer and аn Internet connection. But bе warned: Stock trading іѕ nоt sоmеthіng to jump іntо withоut сonѕіdеrаble thоught. Estimates аre that 80% tо 90% оf all thоsе who begin stock trading today wіll lose thеir trading capital wіthіn thе nеxt 12 months.
Stock trading іѕ lіkе running any othеr kind of business. Thеrе are thrее "secrets" to stock trading success:
Buy whеn thе market іѕ gоіng uр аnd sell whеn the market іѕ goіng down.
Alwaуѕ know whеn tо еxіt. Hаvе а stop loss аnd а profit target
Pick thе "rіght" stock
In thіѕ article we wаnt tо focus оn "picking the rіght stock". Mаnу traders аrе lookіng for hеlр uѕing so called Stock Picking Services, and thеy start their quest by entering thе search term Bеst Stock Picking Service intо thе search engines. Not surprisingly, thеsе "Bеѕt Stock Picking Services" oftеn require a hefty fee fоr thеіr services, аnd you mіght end up gеttіng caught in а ѕо-called "pump-and-dump" schemes.
Hеre's hоw іt works:
Thеsе sо-called "Best Stock Picking Services" buy a cеrtaіn stock that'ѕ typically trading аt $0.02 - $0.10. Many times, thesе stocks аrе nоt еvеn listed оn thе еxсhаnges, аnd the volume іs typically оnly a fеw thousand shares реr day. Aftеr theѕe "Bеѕt Stock Picking Services" bought a fеw ten-thousand оf thеsе shares, thеу start recommending іt to thеіr subscribers. You wіll experience thаt it is not easy to buy thеsе stocks sinсе thеу аrе not listed оn regular stock exсhаngеѕ. And іf yоu аѕk уоur broker to buy thіѕ stock fоr уou, you mіght end up paying 4-5 times morе than normal commissions.
Thе "Bеst Stock Picking Service" іs now hoping thаt many of their subscribers will start buying thіѕ stock. Theу typically ѕаy "It's trading now аt $0.02 аnd іt should gо uр to $0.12". Thаt wоuld bе а whopping 600%. Sinсе stock traders аrе greedy bу nature, manу people mіght start buying thіs stock, аnd sіnсe thеrе іѕ а sudden demand, initially thе stock prices will gо up.
But before thе stock hits thе predicted exіt price, your "Bеѕt Stock Picking Service" starts selling (dumping) thе stock that thеу bought BEFORE theу recommended іt to thеir list. Sіnсе thеy typically bought large amounts оf this stock, thеre's suddenly an enormous supply оf thiѕ stock and prices start falling. Morе and more investors panic and sell thеir stocks; driving stock prices furthеr dоwn. Aftеr а massive sell-оff thе stock іѕ typically trading at the sаme level as it wаѕ BEFORE thе "Bеѕt Stock Picking Service" started recommending it; ѕometimes еvеn bеlow. Investors аrе losing theіr money, and the оnlу winner іn thiѕ game is уou "Bеѕt Stock Picking Service".Catalyst Stocks does not participate in these types of schemes whatsoever. Our system picks stocks primarily on their likelihood of increasing in value by using statistical, technical, fundamental, market sentiment, and other analysis. We will never feature or promote a stock for our or anyone else’s gain. Please avoid those other serv
Getting Started in the Stock Market
Hollywood loves the stock market. The chaos of the stock exchange floor, the tension of boiler room day-trading, devious power brokers making back room deals; it all makes for great drama. Then you have the true-to-life stock market stories in the news: insider trading, big money IPOs, the dot com bust. All of it is enough to make you steer clear of the market for good and travel down a safer investment path. But don't be frightened, history shows that long-term, there is no better place to put your money to watch it grow. Here are a few tips to get you started.
Stocks 101 Simply put, when you purchase stock in a company, you become part-owner of that company. Along with other shareholders, you all combine as investors in the business, and therefore reap its rewards, or suffer its losses. Stocks are most commonly divided into separate categories depending on the size and type of the company (e.g., mid-cap, small-cap, energy, tech, etc.). While speculation can drive stock prices in the short term, it's long-term company earnings that determine a stocks gains or losses. Speaking of short term, that's when stocks are extremely volatile. Over a span of just a few months or years, stocks can climb to astronomic heights or drop to pitiful lows. But, since 1926, the average stock has returned over 10 percent per year. That's better than any other investment vehicle out there, and that's why stocks are your best bet for long-term investment.
Picking Stocks Before you dive head-first into the market, there are a few things you should know about picking stocks. First, the market's performance as a whole is not necessarily a reflection of its individual stocks. Good stocks can keep growing even in a down market, while bad stocks have the frustrating tendency to drop or remain stagnant in a strong market. Also, remember that history is not indicative of a stock's future performance. Even solid stocks can slip from time to time. Remember that stock prices are based on a company's earnings outlook, not its past performance. If the future looks bright for a company, a $100 dollar stock is probably a good buy. If earnings look less than promising, even a $5 stock can be a waste. Finally, investors determine a stock's value by measuring a handful of primary criteria, most notably cash flow, earnings, and revenue. If you can find a good stock picking service that has historically performed well, you would be off to a good start.
Diversify... It's the rallying cry of all smart investors. When compiling an investment portfolio of stocks, it's smart to own shares in companies from several different industries. Consider it a hedge bet. When one part of the economy experiences a downturn, you'll have other stocks in your portfolio to put your faith in. When building your portfolio, the safest bet is to pick from financially strong businesses with earnings growth above the average. Surprisingly, that limits the lot to choose from, as only around 200 stocks today fit that bill. A solid portfolio features somewhere in the ballpark of 20 stocks selected from seven or more industries. A general rule of thumb is to invest in stocks with an above-average rate of growth and reasonable valuations.
What Makes a Stock Go Up
What makes a stock go up or down? Any number of things; things we call catalysts. A catalyst by definition is something that causes an important even to happen, such as a stock going up! You will often hear people saying that a particular stock needs a catalyst to get it moving. This means that the stock needs some good news, SEC filings, insider trades, block trades and more.
Some basic catalysts:
Positive News and Announcements These could be press releases on new products, partnerships, strategies or problems that might improve or diminish the company's chances of success, and for news reports on new products, strategies, alliances or trouble.
Insider Trades Many investors believe that company insiders or employees are a good indicator of how well a company is doing and how well its stock will perform. If you see the CEO for example, buying 10,000 shares it is often a very good sign for the stock because people assume that the CEO believes that his shares are going to increase in value. Insiders are often very early buyers of their own stock and get good prices on it.
SEC Filings / Regulatory Companies are required by law to disclose certain material facts about their businesses to federal regulators every 3 months. Some examples are insider trades and restricted stock sales, ownership changes, special events and other critical shareholder issues. Other regulatory issues could be the listing or delisting of a stock from a particular exchange.
Block and Institutional Trades Block or institutional trades of a large number of shares; normally 100,000 or more normally mean that someone is so confident in a stock that they are literally pouring money into it. Institutions spend large amounts of time and money analyzing a stock before buying it. Investors believe that if it passes muster with the big investors then it must have a lot going for it.
Positive Mentions Positive mentions by analysts, newsletters, television and more sources can often be a positive catalyst on a stock. Many investors follow these sources closely.
Conclusion Although it is easy to see how many catalysts will have some sort of an affect on a stock, one should not invest solely on catalysts. There is a lot more analysis and research that goes into purchasing a stock. Many times very positive catalysts will actually have negative effects on a stock and the price will go down sharply. For example many people may have been holding a poor performing stock for sometime and have sell orders to get rid of it as soon as it goes up slightly. Many of these orders will execute as the shares start to go up and likely trigger a sell-off. There are many other instances that control how catalysts affect stocks. These will be the topic of another article.
Buying and Selling Stocks
Many people who want to start buying and selling stocks in the stock market have never gotten started simply because they are intimidated by their perception of the process. They are afraid it is either too complicated or expensive for the average person. Nothing could be further from the truth. In fact buying and selling stocks in the stock market is a simple process.
First of all you need to have an understanding of what stocks are. A stock certificate is a unit of ownership in a company. By owning a share of stock in a particular company you are actually owning part of that company.
There are two kinds of stocks you should be familiar with. First of all, there is common stock. This is the most common type of stock that is traded and held by the public. If you own common stock you have voting rights along with the right to share in dividends. Preferred stock on the other hand, gives the owner fewer rights except in one important area. Those who own preferred stock usually receive consistent dividends. In fact investors buy preferred stocks for the income from dividends.
The majority of people who buy and sell stocks do so through a stock broker. The most popular stockbrokers have now become online Internet stock brokerage firms. This is much less costly than using a traditional broker. In fact you can trade for around $10 at many online brokerage firms.
Buying and selling stocks is not unlike the other transactions except there is sometimes some haggling. There is what is called the market value and there is the asking price. The asking price is the price that the seller is willing to sell the stock certificate for. The difference between the market value and the asking price may sometimes only be a few cents.
If you are selling stocks you'll need to keep in mind the bidding price and also the price someone is willing to pay to buy the stocks from you.
Although you can always buy a stock for the current market value or sell it for what you'd like to there usually is not a huge difference. The difference may only be a penny. Stocks that are traded a lot on the market will often have little or no difference.
When you found a stock you want to buy and have determined the asking price all you then need to do is tell your broker how many shares you want to buy in your broker buys stock for you.
It's that simple. Do some research into the various online stock brokerage firms and find one that you can feel comfortable doing business with. You will soon be buying and selling stocks on the stock market.
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