Your stock picking strategies just might be the one of the most important parts of trading.
Choosing the right stocks can help you get more of those ups without the downs on the stock market ride.
It’s simple, really:
- Find good stocks
- Avoid bad ones
- And you’re on your way to a great pattern of investing.
With a little know-how, you can make the unpredictable stock market just a little more predictable.
Table of Contents
Tips For Finding the Best Short Term Stocks
Be An Early Bird
Each person will eventually develop their own unique strategy of approach for selecting the best stocks for short term investments, but what will always be the same across the board is that starting early gives you a jump on the game.
8 A.M. is generally a good time to aim for, to have time to get prepared, research, and decide which stocks you’ll be tracking for that day.
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Download this cheat sheet to learn how to find the best plays for short term investments.
What’s The Stock Worth?
Seems like an obvious question to be asking, but it’s got to be asked. Investigate those stocks you’re trading.
You can do fundamental and technical investigations, and also even check message boards to see what the story behind the stock is.
You can use stock scans like the ones from Stockcharts.
These charts will let you know statistics like 52 week highs, percentage gainers, and gap ups – but beware messy charts.
Look for clean charts that will allow you to glean accurate predictions of a stock.
To track all of your securities, there’s few better ways than creating an efficient watchlist.
- Limit the amount of stocks on your watchlist
- 12-16 is a good number to aim for.
- Know the specific criteria you’re looking for, such as:
- analyzing high or low trend changes
- daily percentage change
- or any signals that indicate an unusual trend.
- Create one list for each of these factors to keep yourself organized. (And keep a trading journal!)
If you’re having issues with having too many issues, then it’s a good plan to keep it simple and focus on only a select few stocks.
If you put most of your efforts into following only one or two stocks at first, you’ll get to know those stocks well and learn their trading pattern and technical indicators.
This means you’ll have less work to do before the market close and after the market close.
You’ll also probably be less stressed in general until you’re ready to expand to trading more stocks.
Do Your Daily Scans
Wake up bright an early to get the scoop on what’s happening on the market, with a few key factors in mind of what to search for.
You’ll want to avoid stock that have very high or very low volatility, as these are the most unpredictable of the bunch. Check stocks that are trading volume thinly and which are not.
You’ll want to be able to select stocks that have tight spreads – checking price, volume, and spread are some of the most basic and valuable scans you’ll be able to do quickly to assess stocks.
There’s many tried and true methods to finding the best plays, and it takes time to find the best method for you.
With some experience, trial and error, and dedication, you’ll have what it takes to make profitable short term investments in no time.
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