Are people constantly trying to tell you what stocks to trade? Friends, co-workers, analysts or even James Cramer?
It’s okay, they’re not trying to get you to lose money, they are only trying to help.
In fact, you’re probably expecting me to tell you not to listen to them. You probably think I’m going to tell you that if you buy a stock that was recommended by someone else that you will lose money.
I’m telling you that if you buy the stock WHEN you hear about it you will probably lose money. It’s okay to listen to what people are saying and even get ideas from them but when it’s time to execute, you need to be able to determine for yourself when the right time to buy and sell is.
Example: A friend at a prestigious hedge fund tells me that his company just put tens of millions into a twenty-dollar stock.They believe it should be worth at least forty. He recommends I get involved. So far all I did was listen, that’s okay.
I now evaluate it on my own. The stock is trading at 22. There’s been a lot of resistance at 25. If the stock is going to be as great as he says then I can get in when it clears a major hurdle at 25 and still make good money.
I’m just waiting for the stock to prove itself to me. A couple of months later the stock is trading at 10! Now the technicals are looking good. I buy it for the first time. Not because he told me to. Because he helped get it on my radar and I determined where the good entry point was.
I end up selling the stock at 14 a couple of weeks later. 4 points or 40% in 2 weeks. You should have seen the look on my friend’s face when I thanked him for the stock and he knew I was being serious!
Same thing with upgrades. It doesn’t mean to jump in and buy the stock on impulse. It’s just another stock to put on your radar. The best way to profit from stock recommendations is to add the stock to your watch list and execute when the trade and the risk/reward make sense to you.
If you are a beginner and need help learning how to trade and how to determine what a good trading stock is then click on the link below.
Once you learn how to trade on your own then you are in control and every idea becomes an opportunity. Now let’s go make some money!
Until next time,
P.S. We are currently offering a special book for pure beginners who want to fast forward their stock market
Adam Mesh is CEO and Founder of The Adam Mesh Trading Group. For the past 18 years he has coached thousands of students to all levels of success in trading. He is also creator of the revolutionary Full Contact Trading