Thomas, If you have been pretty lucky, that's the best method I know. :-) But when I am not lucky, I basically follow this routine:
I first try to find stocks with thread activity and good volume. Out of those, I look at Stochastics, Expotential Moving Average Difference (EMAD) as it relates to MACD, and then Momentum, and Relative Strength Index. These things give me a "feel" for how the stock and the players in the stock are reacting.
I look for patterns in each particular stock because it seems no two stocks are just alike. But each one does seem to develop its own "cycles of movement."
News and rumors play a big part in small stocks. So I watch those things carefully and I try to contact the company and the IR people till I am comfortable with how much I am willing to risk on that particular company. Experience has taught me that (IMO) most of the time the company and IR people lie. :-) So I take what they say with a skeptical ear. I try to validate what they tell me. It is easy to be drawn in and played for a sucker. Especially in non-reporting BBs.
Then I go with my intuition. I don't know how to describe this process other than to say that I get a feeling for a target buy-in price. If I can buy for that price, then I am in. If I don't get it, I don't get it. I either wait for my price or look for the next stock and the next opportunity. And there is ALWAYS another opportunity.
I try to never fall in love with a stock. Get out with a profit. It may not always be the highest, but at least it is a profit.
I try to cut my losses quickly. I buy a stock because I expect it to go up. If it goes down, I sell because apparently I am wrong about my evaluation. Maybe my "feel" is just not right. Sometimes I find a new low point to buy in and it works out even better than what I first thought.
My sell point when the price goes up is determined to a large extent by momentum changes. Even if the stock is good for the long term, I might be able to sell and re-buy on a dip.
I am not always right of course. But I am getting better all the time. I work at this a lot and I enjoy it. I lost a lot of money before I learned some of these lessons.
But ALL of these carefully planned "steps" may still NOT be as good as just plain LUCK!!!
GOOD LUCK to us all!!!
Cheryl |
