Stock Picking Guidelines

General Outline of stock picking ideas

GUIDELINE

1. Research for safer quality stocks


2. Study trading ranges


3. Research on company’s fundamental background and operations


4. Analzye on company’s future decision making


5. Look for companies’ stocks that have its operation at overseas, that will yield greater net income.


6. Look for stocks that offer high dividend yield


7. Study the key employers or employees profile


8. Buy selected pontential stocks at targeted price set by you or professional analysis and hold, let power of compounding works for you (Long-term plays with far greater returns) or


9. Buy on dips and sell on peaks, the money make via trading use to purchase for a better pontential and strong stock. (Big Boom expansion technique) or


10. Buy on dips and sell on peaks (Short-term plays – read below for guidelines)


11. Implement money management techniques


12. Watch out for local or global economic changes or any kinds that might affect your stocks performance.


13. Reinvest all dividends


14. Play smart

TRADE ONLY QUALITY STOCKS

1. To reduce chances of major drops


2. Follow just a few stocks – know them intimately


3. Invest in best of each segment to reduce risk


4. Pick good industries – follow trend


5. Pick stocks with “good numbers” (fundamentals)


6. Pick stocks with good dividend yeild


7. Pick stocks with good management and public image


8. Be aware of over valued stocks


9. Be aware of predictions and do your homework


10. Keep your portfolio small for better management and concentration
    

GUIDELINES FOR SHORT-TERM PLAY
BY (http://www.anotherwinningtrade.com/)

A) BUYING ON DOWNSWINGS; SELLING ON UPSWINGS

• Know each stock’s historical trading range and focus on last 60 days


• Chart peaks and valleys and find entry and exit points that the stock hits
  frequently

B) PROTECT YOUR MONEY WITH MANAGEMENT TECHNIQUES

• Pick a budget you could tolerate to lose


• Be prepared to cost average frequently


• Enter 50% of budget into 1st position, and 50% into 2nd position


• Cost average when your stock bottoms out and settles to new low level only,don’t cost average just because it dips

C) PLAN EXIT POSITION BEFORE YOU ENTER

• Generally, try to make 50 cents to $1 per share; don’t focus on percentage


• Place sell order for day only if you can't watch the stock

D) REDUCE RISK BY...

• Avoiding positions with earnings coming out


• Down or out of favor industries are to be avoided / remember these are shortterm plays and we're not investing for the long term

E) GET OUT OF THE "INVESTING" MENTALITY AND GET INTO "MAKE A PROFIT TODAY MENTALITY"

• Take any profit you make as often as you can because stocks move up and down by nature


• We're not waiting for the stock to turn or make significant moves


• We're not trying to find the stock that can hit us a homerun

F) BAILING OUT

• Sometimes you just have to bail out because time is money


• When to? Stock drops more than 20%


• Then what? If stock was good before, it will probably be good again. Buy it back and cost average once it finds a bottom. Then don't wait for it to come all the way back, sell it at the top or near the top of its new trading range and repeat until you recover.

G) HOW TO SALVAGE A BAD TRADE POSITION

• Cost average at 20% loss level


• Sell out beyond 20% and wait for bottom and new range and trade-out


• Hold for long-term

H) MUST USE DEEP DISCOUNT BROKERS

• Scottrade, E-Trade etc
  

STAY ON TOP OF YOUR STOCK LIST

• Keep abreast of any major bad news and delete from list immediately


• Study and search for new stocks continuously