Looking for Stock Tips, here are the 11 best stock tips you will ever need. I have also thrown in two Bonus Videos, which should help.
As an active trader and author, I am often asked for stock tips. What am I buying? What industries am I interested in? Am I long or short in the market? But are these really the right questions? I think not. I think the best questions are:
- Is now the right time for me to be invested in stocks?
- What stocks are the best ones to buy according to my goals?
- How do I limit the risk of my trades?
To answer these questions, I have compiled my Top 10 Stock Tips.
Top 10 Best Stock Tips You Will Ever Need
1. Do not fall for “Pump and Dump Schemes.”
A “Pump and Dump Scheme” refers to the fact there are companies out there that collect email addresses by offering “FREE” Stock Market Newsletters, usually in the Penny Stocks and Micro-Cap area. This company then gets paid by struggling companies to promote their stock to the email list. When the email recipients begin to buy the stock and the stock starts to rise, the company promoting the stock then sell into that strength and make money from the poor people that followed their advice. You can never win with these schemes, do not fall for it. Make your own decisions.
Further information: Pump and Dump Schemes
2. Understand Economics & Business Cycles
The stock market does not move randomly. There are reasons why the market moves up and down in the medium and long-term.
- The health of the economy and the business climate influence the actions of governments and reserve banks.
- Governments and reserve banks dictate the Monetary & Fiscal policies – Interest Rates / Cost of Money / Debt and Budget Management.
- Monetary and Fiscal policy affects the business climate and the business cycle.
- The business climate and Cycles affect the direction of the stock market.
It is an interlinked cycle. The key decision-makers in the cycle are the governments and reserve banks. You need to be able to interpret what impact their actions will have on the stock market.
3. Understand How to Read Company Financials
Can you decide what a healthy company balance sheet looks like? DO you know what fundamental factors to look for to find a fast-growth company of the future? Can you interpret a Stock Price? What does EPS and Accelerating EPS mean? Fundamental analysis is the bread and butter of the Stock Market Analyst on Wall St. But is it not rocket science. You can do it too.
4. Understand How to Use Charts & Indicators
Stock charts are used by the Technical Analysts to assess the supply and demand situation and optimize timing. The Liberated Stock Trader FREE Training Course has a detailed guide to popular indicators and chart types. For a list of the different types of charts, for example, see Stock Charts.
5. Understand How to Scan for Stocks
Who needs stock tips from a newsletter, friend, or company insider? Not you or I. What we need to be able to do is scan for winning stocks. How? By using stock screening. Using the skills you have learned in company fundamentals and technical analysis, you can easily screen for stocks that meet your criteria. There are a number of articles in the Liberated Stock Trader FREE Course to help you achieve this very goal. Never ask for stock tips again; you will not need them. When you learn stock screening, people will be asking you for stock tips.
Great Stock Screening Articles:
- Value Investing Strategy: 7 Proven Value Stock Screeners
- Top 12 Best Stock Screeners & Scanners Review
- 5 Steps to High Dividend Yield Stock Screener Mastery
- 5 Step Dividend Growth Stock Screener Strategy + Criteria
- The 39 Value Stock Screener Criteria Critical To Success
- Our Beat the Market Screener [Actually] Beats the Market
6. Understand How Many Stocks to Buy
Portfolio management is often overlooked. It can often contribute significantly to you making a profit on a trade. Do you know how many stocks you should be buying with your allocated investment pot? This article will give you good insight. How many stocks should I own?
7. Understand Cash Allocation & Risk-Reward
Cash allocation and assessing risk-reward are very important. To be able to assess the reward from a given trade, you can use fundamental or technical analysis or both. From this information, you can set price targets. To understand the risk, you need to set downside price targets. Then you can measure the risk versus the reward. This is really the difference between continual profit and miserable losses. A whole chapter of the Liberated Stock Trader PRO Training is dedicated to this topic. Want a sneak preview of this section, see this article Cash Allocation
8. Create your Trading Strategy
Creating a trading strategy is a combination of all the above. But it needs structure, discipline, refinement, and patience. To create a trading strategy, you need to know what kind of trader/investor you are, what your goals are, and how to achieve them. This is all explained in 7th Grade of the Free Trading Academy.
9. Create A Trading System
Creating a trading system means to put your strategy into a regimented, repeatable, semi-automated system. This can help remove the emotion from trading, but it is also easier said than done. Read the 10 Steps to create a great stock market trading system.
10. Use Stop Losses
This is a really simple yet extremely important stock tip. Stop losses allow you to automate the selling of a stock you have bought at a given price. They allow you to limit your risk (according to your risk-reward ratio) and give you peace of mind. But where should you set your stop-loss? This is an important question. This question is completely covered in the Liberated Stock Trader PRO Training course is a section I call the Escalator Method.
Bonus Stock Tips
1. Watch this Stock Tips Video.
2. Long-Term Investing Tips Video
Watch this video I made based on a question from a student on my 121 coaching sessions. The question was, “How do I formulate a long-term investing strategy” The video was shot back in 2011, but the strategy remains equally valid today.
All the Stock Tips You Will Ever Need!
So there you have it, all the stock tips you will ever need. Well, not quite. Did you expect me to tell you what stocks are hot, what stocks you should buy now? No, that is not the goal of the Liberated Stock Trader. The goal is that you find your very own hot stocks and take control of your own future.
Take a completely Free Stock Market Training
Take your very first Liberated Stock Trader PRO Lesson for Free
Other Chapters of the Liberated Stock Trader Book are listed below
This chapter sets the stage for the two key areas of stock market technical analysis and the fundamental analysis of companies including macro and micro economics
This chapter looks at what REALLY makes the markets move, what causes boom and bust cycles and how to spot them.
What are stock market cycles and the cycles of business and economies. Important information that you need to appreciate as part of your core analysis.
Next we move into fundamental analysis and the financial fitness of a company. All the major indicators and measures are covered.
Stock screening means using criteria to short list the kind of stock that you want to purchase. A vital part of any stock market training
Once you know the business climate, the state of the economy and you have shortlisted the stocks you want to buy. The next thing to do is the technical analysis. Even if the company looks great on paper, if the stock price is plummeting you do not want to buy it until it has bottomed out. This is called catching a falling knife. This is what chart patterns and technical analysis helps with.
Here we get into the art of drawing on charts to help you visualize the Supply and Demand on the stock, the direction of the trend and estimate how long the trend will last. Vital for you to establish buy and sell signals.
Which indicators should you use, there are literally hundreds of stock chart indicators. Each have a specific use case and application, which should you use?
Volume is a vital indicator along with price. Both of these you need to understand in granular detail, you will learn everything you need to know.
Moving to advanced technical analysis we cover indicators such as parabolic SAR and point & figure charts.
How are the market participants feeling? Positive, Negative or indifferent. Consider that 90% of people fail to beat the average market returns, sentiment indicators can be a great contrary indicator. Lean how to use them to your advantage.
Understanding how you want to invest, how much time you have and your time horizon. These questions all help you to understand what type of investor you want to be, this then enables you to select the right strategy for you. Then we move on to building your stock investing system, a critical element to your plan.