Techniques and Tips for Finding the Best Stocks in 2020

Traders are always on the lookout for new techniques and tips. So how can you find the best stocks* in 2020?

Here’s the thing … I truly believe we’re living in a golden age … Only most people don’t realize it.

The economy’s pumping. Unemployment is near all-time lows. The stock market consistently hits new all-time highs with the S&P 500 index returning over 30% in 2019.

It’s a heck of a time for traders, investors, and everyone in the stock market. And with the new year upon us, many are looking to find the best stocks worthy of their hard-earned cash.

In this post, I’ll share some of my techniques for finding the very best stocks to trade.

I’ll also share a list of the 10 stocks that the StocksToTrade team and I believe are well-positioned to do well in the ongoing bull market.

Plus, I’ll answer some common questions about picking stocks for your trading style.

Let’s jump right in…

[*The definition of ‘best stocks’ is subjective and may differ depending on your trading strategy, knowledge, goals, and circumstances.]

How to Find the Best Stocks in 2020

Did you know that over 18,000 stocks are traded in the U.S. each day?

If you spent just one minute analyzing each stock, it would take you over 12 days to get through all of them. And by the time you finish, most stock prices and company fundamentals would likely have changed.

So it can seem like it’s super hard to find the best stocks to invest in…

But that couldn’t be farther from the truth. In reality, to find the best stocks, you need a solid, well-planned process. And you need the right tools.

Here’s a list of simple tips and techniques that can help any trader or investor find awesome opportunities…

Have a Trading Plan

There’s a common trait I see in the most successful traders I know … They all follow a thorough trading plan.

Your trading plan is where you list every detail of how you’ll conduct your trades. It’s similar to someone writing a business plan before opening a new business.

A good trading plan includes things like what types of stocks you’ll trade and your entry and exit. It also includes how you’ll manage a losing trade, how much capital you’ll risk, and so much more.

It’s smart to develop a well-researched trading plan before you make your first trade. Check out our blog to learn some super simple and effective techniques to add to your plan.

Follow the Broad Stock Market Action

For most traders, the easiest time to make money in the markets is when the S&P 500 is in a strong uptrend.

Thankfully, as we enter 2020 the stock market is booming. It’s routinely making new all-time highs, and it’s not hard to find stocks that are powering along.

Watching the broad index can also signal when it’s time to exit your stocks. It can indicate when the market seems to be running out of steam.

You can track the S&P 500 index by bringing up the SPY (NYSE: SPY) ticker on your trading platform. As long as the chart is making higher highs and higher lows, we’re in an uptrend. If that pattern changes, it may be time to proceed with caution.

Locate Exciting Stocks with a Stock Scanner

Stock scanners are a great tool we have as traders today. These are programs that search through stocks looking for specific criteria that could indicate a high-potential trading setup.

Before the age of the stock scanner, many of us had to browse through countless stock charts before the market opened each day. We had to study news stories each evening and fry our brains looking through company financial statements. I’m glad those times are behind us.

Analyze the Stock’s Fundamentals

The first step for many longer-term and swing traders is to analyze a company’s fundamentals.

Company fundamentals are things like a firm’s profits, losses, and debt. It also includes the company’s business model and its management’s future plans.

By analyzing a company’s fundamentals, you can get a view of what you’re actually buying when you purchase shares. Be warned though … Sometimes stock prices of great businesses drop. And prices of terrible businesses can rise.

Follow Price Action on the Stock Chart

Once you have a stock you want to trade — either short or long term — it’s a great idea to analyze the stock chart.

The chart will tell you historically what the stock price has done. You can see key levels, whether it’s currently in an uptrend or downtrend, and so much more.

The chart can also help you fill in the details of your trading plan … intelligent levels for your entry, stop loss, and exit. Check this post out to learn some basic chart patterns.

Keep a Watchlist of Interesting Stocks

Once you write your trading plan, analyze company fundamentals, and look for interesting price action, you should have a solid list of exciting potential stock setups.

Now you want to start building watchlists to track stocks that show the most potential.

Most traders keep a few watchlists, maybe one for blue-chips, another for penny stocks, and perhaps a few for specific sectors like biotech or marijuana.

(Pro tip: Sign up for StocksToTrade’s FREE watchlist here.)

Use a Trading Platform to Analyze and Manage Trades

By now, you probably realize that there’s a lot to trading and investing. You have to find, enter, and manage good trading setups.

You have to scan the markets for exciting opportunities. You gotta do your research and analyze the companies. Then there are the charts, indicators, and so much more…

Back when I started trading, that meant using a ton of different websites and software programs. I had to click between clunky interfaces and try to stay on top of everything. Not gonna lie, it sucked!

Thankfully, in 2020, we have the luxury of technology. We get to use highly functional trading platforms — like StocksToTrade.

With a trading platform like StocksToTrade, you have access to just about every tool you need. Smart tools make a difference. They can help make the trading process less stressful and more streamlined.

Yeah, I’m a little partial … but I LOVE StocksToTrade. And if you’re serious about your trading career, I think you’ll love it too. But check it out for yourself. Get a 14-day trial of StocksToTrade for $7. See just how awesome it is to have all your trading tools in one easy-to-use program.

How Do You Buy Stocks?

Buying stocks is a super easy process these days…

First, you need to open a stock brokerage account. You can do that online, and it’s fairly simple. But be warned: not all brokers are equal.

It’s wise to pick a brokerage firm that’s located in the U.S. You want a firm with a solid financial backing, one that’s regulated by the government. For a detailed look at how to choose the right broker for your needs, check out this post.

Next, you need some capital in your account so you can purchase stocks. You don’t need much … $1,000 or more should be sufficient if you’re just starting. You could even start with less…

At this point, you can use your broker’s website to purchase stocks.

Of course, you want to analyze those stocks before you jump in. And you want to watch them as long as you hold them. The simplest way to do this is by using a trading platform like StocksToTrade. Grab your 14-day trial of StocksToTrade for just $7 now.

Watchlist: The 10 Best Stocks to Watch in 2020

I sat down with the StocksToTrade team to brainstorm a 10-stock watchlist that would suit the newbie trader or investor.

We looked for solid, respectable companies that could still be strong by next year. These companies could benefit from an ongoing bull market.

With that criteria, we came up with ten larger-cap stocks with promising businesses, in growing industries, that have been in uptrends in line with the overall market.

Here they are, in no particular order…

#1 Visa Inc. (NYSE: V)

Visa is the top dog in the credit card duopoly it holds with Mastercard. And it’s one of the most consistent major stocks in America.

The company has growth plans globally. But what’s really notable is its performance over the last year — it’s up nearly 40%. It also has a clean uptrending chart.

#2 Pinterest Inc. (NYSE: PINS)

Pinterest is a social media platform with a huge audience … But it hasn’t really monetized its userbase like Facebook and Google have.

The company’s working to correct this. It’s revenue picked up in the last year, followed by the stock price.

#3 Beyond Meat (NASDAQ: BYND)

Beyond Meat had its IPO just last year. The company is in the plant-based meat market. Personally, I’ll likely never eat the product. But a huge part of modern society loves it. There’s money to be made in this market…

#4 Luckin Coffee (NASDAQ: LK)

Luckin is China’s answer to Starbucks. It’s a huge coffee-shop chain that’s mainly in China. The company more than doubled its number of stores in 2019.

#5 Canopy Growth (NYSE: CGC)

No 2020 list would be complete without a marijuana play — Canopy Growth is my pick.

The Canadian pot stock is one of the bigger names in the sector. It could turn the corner into profitability in the next year or two. The price action on the chart is solidly bullish since late 2019. I’m watching this one.

#6  Snap Inc. (NYSE: SNAP)

Snap is the social media company best known for its messaging app Snapchat.

The company is working to improve its advertising … It could be well placed to profit from the global growth trend in digital ad spending.

#7 Square Inc. (NYSE: SQ)

Online shopping is becoming more and more the norm. So the sector for processing online payments is red-hot — and one stand-out performer is Square.

The company seems to be growing at a fast pace and preparing for its next move up.

#8 The Trade Desk (NASDAQ: TTD)

Here’s another ticker in line with the online advertising theme: TTD.

Spending on online advertising is growing as the global economy improves. Plus we should see a blitz of political ads leading up to the 2020 election.

#9 Activision Blizzard (NASDAQ: ATVI)

Activision Blizzard is a huge name in the video gaming space. It’s in quite possibly the hottest entertainment genre on the planet.

Activision has solid growth, and the wave of gaming consoles due later this year could boost this stock more.

#10 Coca-Cola (NYSE: KO)

I’ll end this list with a safer, more recession-resistant stock: Coca-Cola.

Sure, the world consumes fewer sugary beverages than before … but the company is working to move to healthier alternatives. If it continues to adapt, it could maintain its position for years to come.

The Best Stocks Watchlist: FAQ

For well over a decade, I’ve lived and breathed the markets.

In that time, I’ve networked with countless traders, from beginners to elite professionals. I’ve spoken at trader summits, participated in online forums, and learned many trading and investing styles…

Over the years, I’ve seen the same questions pop up over and over. So I’ll take a moment and answer them here…

What Are the Best Stocks for the Long Term?

When looking to find the best stocks to hold for the long term, first you gotta prioritize. Are you looking for consistent dividend payments, capital growth, or a combination of both?

Maybe you’re retired (or about to be) and want to supplement with dividend income. In that case, you can look for stocks of rock-solid businesses with a history of paying consistent dividends. You don’t want to risk your capital on wildly growing businesses that need to retain profits to grow.

If you’re looking for capital growth — buying a stock and later selling it at a higher price — you first want to find an industry that’s likely to grow for years.

One example could be the budding legal marijuana industry. It’s a largely new industry with a huge potential market. Some analysts even say that it could be as big as the soda industry…

Once you find a promising industry, scan for the strongest stocks in that sector. Look for the strongest uptrends on the chart and consistently improving company fundamentals.

What Are Value Stocks and Value Investing?

I always get questions about value investing…

Newbie investors tend to fall in love with the wise and folksy persona of Warren Buffett. They often want to copy his value investing style.

That involves analyzing a company and determining the stock’s value. Maybe that’s $10 per share. If the market eventually declines to $8 per share, you can purchase the stock … You’re effectively ‘buying $10 for $8.’

This investing style involves a lot of patience and accounting know-how. You have to scour through the company’s financial reports.

Personally, I lean toward using charts and trading hyped-up new stories, which brings me to my next question…

Which Stocks Make the Biggest Moves?

A lot of newbies are surprised to earn that in the long term, the S&P 500 returns roughly 10% a year. How can that be when there are news stories about stocks being up 10%, 20%, 50%, or more in a single day?

You likely won’t see stocks like Microsoft (Nasdaq: MSFT) or Amazon (Nasdaq: AMZN) gain 20% in a single day. So where will you find those kinds of moves?

In penny stocks!

These are the stocks at the small end of the market. They’re small companies with stock prices of $20, $10, or less. Penny stocks are my main passion and what I focus on every day.

The smaller end of the market is perfect for traders who don’t have millions or billions of dollars to manage, like traders at hedge funds and banks.

If you have the skillset, penny and small-cap stocks can be the most exciting area of the market. It’s where you can find some of the largest and fastest price moves. But you have to invest in your education. Trading these stocks takes commitment, knowledge, and preparation.

The right mentor can make a huge difference in how you learn to trade. That’s exactly what I focus on every day.

If want to learn more about this market niche, come join us in the StocksToTrade Pro community. It’s where I teach traders just like you how to find the best trading opportunities each day.

Use StocksToTrade to Find the Best Stocks

No matter which stocks you trade or invest in, you need the right tools for the job!

You want to be able to quickly and easily scan the markets to find high-potential setups. You want to pull up and analyze charts. Plus you want to see company fundamentals and stay on top of social media, news, and more.

The StocksToTrade trading and analysis platform allows you to do all of that. And it’s all in one simple, easy-to-use program.

It’s the trading platform created BY traders FOR traders. See why many of the world’s best traders use StocksToTrade — get your 14-day trial for just $7 today!

Conclusion — Where Are the Best Stocks? 

Finding the best stocks for 2020 may seem daunting at first … But don’t stress! First, think about your goals. Then build a plan and process for finding opportunities that can help you reach those goals.

The above list shows ten large-cap stocks that are currently looking solid and should do well as long as the stock market continues its historic boom run.

The key here is learning how important it is to develop a solid process for finding and managing investing and trading opportunities.

That’s all successful trading and investing really is — a thoughtful, planned process that you can execute again and again.

If you’d like to learn my daily process for handing the stock market, join us at StocksToTrade Pro. I share my trading screens, tell you exactly what I’m focused on, and teach cutting-edge trading strategies.

What are your trading and investing goals for 2020? Tell me in the comments below!