Hot Stock Picks
All investors must be aware of any newsletter, company, or investor who advertises hot stock picks. While there are hot stocks out there you will just have to find them on your own. Newsletters don't really work because all they really provide is a long list of recommended stocks. Then once a small number of those stocks perform well, they boast of their stock picking abilities while ignoring those stocks that did poorly. So while many newsletter subscriptions will tell you how great they are at picking stocks, you are better off doing the research yourself. The stock analysts on the news will also provide you with a list of stocks. The same thing happens there as well, where they brag about the successful stock picks, while ignoring those that were not money makers.
What every stock trader and investors should do when looking for hot stock picks is look for those companies that drive growth. You want to invest in a company who finances their growth from profits rather than borrowing ore selling more shares. Companies that have at least a 15% return on equity are potential picks. The earnings estimates will also tell you a lot about a company as well. Smart investors will take a look at a company's past earnings as well which will provide some credibility for those companies that have been able to maintain existing trends
Investors also stay away from cheap stocks when looking for hot stocks. While all stocks should be fairly evaluated, smart investors do not jump on cheap stocks. You can look at a company's price to sales ratio to help determine their value and if their stock should be considered cheap. This along with many other factors should be taken into consideration when investing in stock.
When short term trading, many investors opt to utilize candlestick analysis to find hot stock picks. Candlestick signals immediately tell the investor that new dynamics are changing investor sentiment without going into these changes are taking place. Rather than understand why, the candlestick trader simply acts on the signal of change to pick the best stocks.
While there is no golden rule to picking hot stocks, Japanese Candlesticks provide a very helpful system for identifying market changes and allowing investors to enter a position that has a high probability of producing big profits.
Market Direction: Why are candlestick signals and patterns effective? The human psyche works in a consistent manner year after year. This is obviously the basis for recognizing candlestick signals. Investor sentiment produces the same investment patterns over and over. Candlestick analysis merely recognizes the patterns and signals that will produce a high probability result.
Is the Dow producing a pattern that can be recognized? The past three days have negated the potential 'sell break' of Monday. If you will look at the Dow chart during April of this year, you will see the exact same price pattern. Recognizing what each individual daily signal foretells allows an investor to more accurately assess what the overall market trend is going to do. This allows for taking advantage of price patterns that will perform well during a specific market conditions. If today's analysis reveals there is not going to be any severe change of investor sentiment, the price patterns that are in progress will be able to perform as expected. Currently, Jay hook pattern's are producing extremely good profits. Back in April, when the market was in a slow steady uptrend, Fry Pan Bottom patterns produced extensive profits.
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Successful investing involves placing funds in positions where a high profit potential result can be analyzed. When you consistently put the probabilities in your favor, the returns of your portfolio will start growing on an exponential basis. The reason for this is twofold! First, you are placing funds in situations where the probabilities allow for a high profit potential. Secondly, the number of losing trades become greatly diminished. There will be losing trades, but the losses can be cut short when recognizing the trade is not working as expected.
Being able to add other simple evaluations allows for a better probability of being in the right position at the right time. Knowing that the current market conditions do not warrant any severe reversal potential, an investor can exploit the high profit potential of patterns. The banking sector are producing numerous Jay hook pattern breakouts. The Jay hook pattern can be see in many other areas. Utilizing the information built into a pattern creates the opportunity to make very big profits during a mild uptrend or flat market conditions.
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This is not a difficult process to analyze. Each signal and pattern have expected results. These results have been identified through many centuries of profitable trading. Learn how to use these signals and patterns correctly and you have control of the results of your portfolio.
When option trading or commodity trading, the signals and patterns produce extremely good timing elements for a trade. October Lean Hogs were bought immediately upon the open as it traded above the T-line, after a long legged Doji followed by a Bullish Engulfing signal. Stochastics coming up out of the oversold area made this a perfect entry point.
October Lean Hogs
Chat session tonight at 8 p.m. ET. Everybody is welcome. Click here for instructions. This has been a very profitable summer using candlestick signals and patterns. Usually August is when everybody has for the beach but this year there has been very profitable opportunities during the lazy hazy crazy days of summer.
Good investing,
The Candlestick Forum Team
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