Before introducing the specific methods, we want to say something that seems to be beside the point, but it is actually very important.
Everyone has his own trading style. Maybe you don't realize it clearly, but it does exist. Trading style is closely related to your living environment, personality, experience and preferences. So, first of all, you have to understand what kind of trader you are and combine your own conditions to choose the right stock for you.
In addition to the personalization we mentioned above, there are also some common things in stock selection, which are introduced below.
First, stock selection means choosing a company. Choosing a company depends on the industry in which the company is located. The sunrise industry is good in the wind, but if it is a sunset industry, it must be cautious. Even if the company is no matter how good it is, it will not develop very much due to the restriction of the big environment of the industry. Therefore, in terms of industries, we should look for industries with inflection points or good development prospects.
Second, we should focus on the fundamentals of the company. A good company's main business is very clear, with only one main business and no more than two main businesses (unless it is a capital platform integrated type that can be operated across industries). Because you are specialized, you can be refined. Companies with too many and complicated main businesses have too many stalls, too many expenses, and it is difficult to manage them carefully in the short term, which restricts their specialization.
Therefore, it is necessary to find leading and monopolistic companies or companies with a large share in market segments.
Third, we should examine the credibility of the top management and operation of the target company. Why do you say that? Because whether a company operates well or not, in the final analysis, lies in the management of the company. Professional, enterprising and responsible is a good management.
Listed companies generally have an investor relations department, which is responsible for communicating with shareholders of tradable shares. You can communicate with the companies you like online or by telephone.
Fourth, the psychological quality should be strong. If you don't choose suspicious stocks, you don't doubt the stock selection. I believe that the selected stocks will work hard to make money, don't change stocks frequently, and don't catch up when you see any market hotspots, so you have to turn off the lights and eat noodles.
Fifth, if you find undervalued stocks, you should find out why the stock price is undervalued and why the stock price has fallen. It needs to be explained here: undervaluation does not mean stocks that have fallen sharply, and good stocks generally do not go deep.
Sixth, the timing of intervention, generally speaking, underestimating the rise of stocks will not happen overnight, and there will be several waves of downward exploration, which can be intervened after 2-3 waves of decline; For stocks at a high level, you can wait until the adjustment. Don't rush in when you see that the daily limit is about to rise, or that it has been rising for several days.
Seventh, if the amount of funds is small, generally buy 1 stock for long-term intervention. Only in this way will we make greater efforts to understand all aspects of the stocks we buy, and don't scatter a small amount of money on a large number of stocks.
Eighth, understand the degree of capital intervention through the K-line chart and the entry and exit of tradable shareholders. Retail investors don't have the financial resources and energy to conduct on-the-spot investigation and understanding of each company, so it's better to get involved in stocks in which some funds have been involved on a large scale, or at least the top ten tradable shareholders are funds. Although the fund will also step on thunder, at least there will be less thunder.