Picking Stocks for Beginners
One of the biggest problem you will encounter when you are first starting off is picking stocks. The answer to this is simple. It doesn’t matter what stock you buy. It’s true. WHEN you buy the stock is far more important. The purpose of chart analysis is to take the emotion and guesswork out of trading. Along with your Robinhood app, which we have dubbed the Make America Wealthy Again tool. We are going to need our FinViz screener tool (this link will have a preset search) for picking stocks. You can play with the settings and sort them differently. If you click on the chart tab it will show them to you they way you have it sorted. I’ll normally try to find stocks that have been going down but within the past few day been showing signs of going back up again. The name of the game is Buy Low and Sell High.
Charts and Candlesticks
After I find a few that catch my eye I will load them into a Charting tool at either app.technicianapp.com or tradingview.com. The technician app website has an app for your phone that will synch with your charts on your PC. I find this really helpful when I’m on the road. By default, the chart is going to show you a bunch of bars as the chart.
As long as you have the chart set to ‘D’ or ‘1D’ each bar is going to show you how the stock traded for that particular day. If it’s a green bar, the bottom of the bar is where the stock opened and the top of the bar is where the day ended. The lines on either side of it simply show if it went any higher or lower than that before it closed. Even though the Robinhood app shows a line graph, it is still important to know how to read candlestick charts because they tell a more accurate story of what is going on. If you change the chart view from ‘D’ to ’30M’ each bar is going to tell you what happened every 30 minutes. It is simply zooming in on the day. You can zoom in very far but it’s important to always remember what the bigger picture looks like. If the Daily chart tells you the stock is going down just because you see a good move on the 30M still usually means you are going down. Your Buying strategy needs to revolve around where it is closing on the Daily. You can also change the chart to a line graph if you prefer it to look similar to the Robinhood app. Takes some time to get familiar with these and we will go into some more advanced buying and selling techniques in the next blog.
If what I’m describing sounds like something you are going to be interested in pursuing
then don’t forget to pick up this book: