Stock Picking Tips

1: Trade stocks using a system and stick to it.

Show no emotion when you are picking stocks. Develop a system and stick to it no matter what. Do not buy or sell a stock because of fear. you might have to tweak your trading system, so start by being conservative, then start allowing for a 2 or 3% loss

2: Before you use your Stock picking system, test it, then test it again, then test it again.

Before you start actually buying and selling stocks using the system you have devolped, test it ALOT. There are great programs to do this. One of my favorites is Updown.com It is totally free, and you can test your stock picking system to see if it works.

3: Do not buy stocks based on hot stock tips from a friend.

This will always end badly, and I mean always.Stock picks from your friends are just a bad idea. Even though the temptation is great to buy a few shares, dont. You will thank me later.

4: Do not waste money on Stock transaction fees.

If you buy and sell stocks more than 5 times a week, please do not waste your money on $8 and $15 transaction fees. Use a stock broker like interactivebrokers.com. They only charge a penny a share. This is a great way to save on transaction fees. If you trade more than 200 shares at a time, my choice would be ChoiceTrade.com

5: Learn how the stock market works.

If I had to choose one source of information to get your stock market knowledge from, it would be Investor’s Business Daily Digital Edition! This is by far the best place to get information on stocks and the stock market.

6: Fix your stock picking mistakes quickly

If you buy a stock and later, find out that it does not fit your stock picking system, get out. Do not wait to see what it does. Cut and run, then dont look back.

7: Do not trade stocks on News.

If you buy a stock because of news that just came out, you are too late. This is a sure way to be on the wrong end of a stock trade.

8: Never use dollar cost averaging for your stock portfolio.

My advice would be to never dollar cost average your stock picks. Get out, you are just going to lose more money. Why would you keep putting money in a bad stock.

9: Never try to catch a falling knife.

People love to buy stocks that have hit new lows. The problem with this is these stock picks tend to go down even further. Never pick a stock because it is at the lowest it has ever been.

10: The worst time to buy a stock is when everyone is talking about it.

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.