If you’re looking to make money trading stocks online like I was for a long time you’re going to learn a few things quickly about the stock market. The first is that the stock market (and the economy in general!) is a fickle beast. A company could be on top of the world and then the next thing you know they bottom out like nobody’s business and you’ve lost half your savings in a stock that’s gone belly up. This gets a lot of people afraid of the stock market. The only reason they have to be afraid is if they’re trading incorrectly! Below are my number one tips and some resources to help you trade your best and not lose your shirt in the process. Here’s how to pick good stocks to invest in!

Finding Good Stocks To Invest In Tip #1 : Don’t Be A Sheep

A sheep always follows the herd, but if you try to be a sheep you’ll most likely be following the herd too late. See, what happens is a lot of inexperienced people see a stock that is blowing up and gaining momentum and they jump in when it’s at a high cost. This is wrong. This happens very frequently on penny stocks and is called a “pump and dump” where in a lot of investors throw money at a stock and create a frenzy to drive the price up. When it gets to a point they like they sell it all at once and leave some poor schmuck holding all the worthless shares.

I had a short foray into penny stocks, but if you don’t have a lot of money you can afford to lose you should avoid this. I still avoid it, because it’s just too volatile for my tastes. You can get plenty decent gains in steady stocks. When you’re looking for stocks forget all about charts and take a few main things into consideration. Those things are price and community opinion. We have a great opportunity now to share our opinions with each other. Find investor’s forums and social media high lighting your stock. This will show you it’s real value.

People think a company is worth a specified amount of money because of size and profit and that’s only partially right. A company is like everything else in the world. It’s worth only what people will pay for it. If somebody starts some bad news tomorrow (even if it’s wrong) then Disney could see their stock plummet for no reason. It’s really that simple. My best strategy so far is to find a stock positioned at or close to its 52 week low that still has a decent public opinion. Why? They almost always go back up unless you have a General Motors type fiasco.

Finding Good Stocks To Invest In Tip #2 – Don’t Jump Ship

If you find a stock you like and it’s either not doing anything or has taken a small loss don’t get antsy and jump ship immediately. Securities have ups and downs and that’s just the way the business plays itself out. If you can take the bumps you’ll never make any money in the stock market. Decide which stocks you are long on; the ones you’re willing to keep in your retirement portfolio. And the ones you are short on; the ones you want to flip for some money but don’t think you’ll keep for the future. If you want to try something even better you can get into options trading to make some “rent” so to speak on your long term stocks, but that’s another article.

If you think you really have a loser then tally your losses and move on to greener pastures. Make sure to put any losses on your tax return to help soften the blow. If you do decide to hang on to a stock you really believe in then be prepared to wait it out. It may take a long time to get back on its feet or it might not. This waiting becomes easier if you picked a dividend stock since you know you’re getting at least some return on investment. I have some articles on dividend stocks as well if you want to add those to your portfolio.

Don’t get weighed down by the little stuff. You can learn from everybody, but don’t let that make you afraid. A lot of people get upset over a little loss over stocks. Let’s take things into perspective using my option trading as an example. I most likely lost around $3,000 in 2010 when I took my first foray into options trading.

Oh, well that doesn’t look good. However, when I did my taxes at the end of the year it turns out that after subtracting my losses from my gains I was still positive $9,000 for my first go. You need to be able to look at the big picture if you want to make money in the stock market. Some of my wins were as much as 150% gain! When I started investing in 2008 after the market crashed I made 50% -100% gain in about three months on stocks that people were afraid of. These were solid names like AMD, SIGMA, and Helix Corp. At least 2/10 stocks you choose will be a loser (Here’s looking at you General Motors), but I still made money over all. Diversification is the biggest tool you can use for your success.

Best Tools To Find Good Stocks To Invest In

If you’re really serious about learning how to find the best securities to invest in to make a full time income trading now check out Stock Assault. You can get a 100% free demo of this awesome software to help you make the most of your trading. Hedge fund managers and big banks use great software like this to make huge returns and now it’s available to the little guy like you. You can use this software robot to start trading automatically with as little as $200 on your desktop computer. They guaranteed $300-$500 in profit or they’ll refund your money – no questions asked.