Selecting stocks to trade
Having been a value investor over a long period of time my selection routine starts by sifting through the financials first and then scrutinizing the results for stocks with a strong trend and a favourable buy / sell ratio......
The stock search section on my commsec platform provides a myriad of financial criteria from which you can screen – from pe’s, dividends, capitalisation, liquidity, debt / equity, growth over 1,3 & 5 years, for both earnings and performance....... i am able to copy my list of screened results onto my excel program which then makes it easier to further sort....... after that the search for the stocks with the best looking charts begins......
With using this method the theory is that i am selecting the stocks with the best financial credentials for either going up or or down, together with the best charting patterns also......
That’s the way i’ve been doing it...... but now ST78 has come up with some stocks with some incredibly good looking charts, and so i start thinking to myself am i going about this in an unnecessarily long way – when i guess all i want is a chart with a strong trend in my preferred direction plus a very favourable buy / sell ratio and i can be on with reasonable confidence......
Yesterday, with the price of both iron ore and gold trending down and those sectors also trending trending down, i thought that shorts on stocks in both those sectors would be the go....
On the commsec site I screened the gold sector for stocks with a capitalisation in excess of $250m. And with their liquidity displayed and got 15 stocks..... i then put their charts up and selected what imo were the best looking ones, then placed short bids for two of those ....
Selecting the iron ore stocks for shorting was a bit easier.......
Anybody else like to volunteer as to how they go about this task ...
