Are you 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 sells into that strength and makes 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 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 do 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
The Technical Analysts use stock charts 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 several 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 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 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, your goals, and how to achieve them.
9. Create A Trading System
Creating a trading system means putting your strategy into a disciplined, 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
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 to find your very own hot stocks and take control of your own future.
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