Make Money In Stocks

Knowing the general stock market direction is critically important to investors and traders everywhere. The bottom line is this: Most stocks (80%+) follow the general direction of the stock market. In a bull market cycle, most stocks will hold their own or rise. In a correction or bear market cycle, nearly all stocks will fall. And stocks tend to fall much faster than they rise!

It does not matter how good a stock’s earnings and fundamentals are or how well the stock has been accumulated over the last several months. Make no mistake, when the market turns bearish, the correction can be brutal. It can do a lot of damage to an otherwise good portfolio.

A great case in point would be Apple (AAPL: Nasdaq). In the brutal bear market of ’08-’09, AAPL fell close to 60% in value, even though the fundamentals never changed. I am sure you can think of a few stocks that did the same!

In bull markets all the cream rises to the top and keeps rising! In bear markets everything pretty much comes down.

Now as a full time stock market trader, I make no distinction between “long-term” bull and bear cycles or what the talking heads on TV love to call “Secular Bull” or “Secular Bear” markets. Stocks are either in uptrends or downtrends, period.

In his bestselling book “How to Make Money in Stocks“, William O’Neil teaches investors exactly how to determine the stock market’s direction and how to make decisions based on this direction.

In summary, if you want to improve your investment or trading results, know the stock market’s general direction. If you are buying stocks in a market correction you have a much higher probability of losing money and vice versa.

A stocks watch list is an important tool for people who are planning to invest in the stock market. You can use this tool to sort out the losers from the winners. It is really quite easy to create such a list if you have a stocks picking software or platform. This tracking list should be used to keep all information or data about stocks of attractive companies. Some of the details you might want to include in your list include volume, price, and press releases or news about the company or the industry.

No matter how hard you try, it is quite impossible for you to track the movements of all stocks in the NYSE or NASDAQ even if you have a stocks watch list. Thus, it is really quite important that you find a good stock market system that also provides you with the ability to create your own custom watch list. Make sure that the stock market software you pick watches at least 2,500 stocks so you will have a wide array of choices. In stock trading, you need variety so that you can come up with a diversified portfolio. You also need a lot of patience in checking out stock alerts, movements, and other pertinent data that can affect your chances of making money through your investments.

Since you cannot put all 2,500 stocks in your stocks watch list, you need to program your system in choosing what stocks to include and what to ignore. For one, you need to look at the trend. If you want a low-risk portfolio, then you ought to focus on stability and dividend payments. However, if you want to make money in the short-term, you have to sort out stocks that you believe have the capacity to grow only in the future. If you want fast money, only include companies that belong to industries that are in demand and have great potential to surge in a few months.

Lastly, you might also want to consider what the financial community feels about the particular companies you invested in. Are investors bullish or bearish about the stocks of the companies you picked? This is particularly important if you have already acquired the stocks of the companies in your stocks watch list. You want to know the general sentiment of other investors because you would want to maximize profits and minimize losses. Aside from the watch list, you also need a good source of information and technical analysis.