Asking this question is something that many new stock traders do too often. After all, no one gets into trading stocks to lose money. But it happens. Until a you find a winning strategy.
What winning strategies you ask?
One of the most popular strategies is called momentum trading where a trader looks for stocks with a rising price on rising volume. Doesn't that mean this is a good stock because more and more investors are interested in it? Maybe but not always.
More and more investors may get interested in a stock because the company behind the stock has a good story. A stock may have a good story that hits the news and draws the attention of investors based only on the sensationalism of the story. If it's a short story then the price of the stock can come crashing down. Usually this is because the stock price was based only on the story no viable product (viable meaning product that makes money).
Rather than trying to ride a stock that is already rising due to a great story it's better to find a stock with a price that will begin rising soon, and get in before the rise. How do you find those stocks. Believe it or not there are foot prints to follow. How to do that will be in the next post.
Note: Most Excellent Investor subscribers get access to watchlists that contain multiple stocks per hour.