Best US Stocks – Introduction
I have been day trading for the past few years and the journey so far has been nice. I started trading currencies, then moved to crude oil, and then to stocks. Today, I trade all these instruments. To a large extent, a lot of trading has been focused on currencies. This is especially because of the fact that currencies is a $6 trillion a day market. Also, the market is usually opened for 24 hours every weekday. There are thousands of companies listed in the major exchanges in the United States. Selecting the best companies to trade can be a challenge. This is especially because you want to trade companies that will make you money within a short period of time. This article will guide you on a number of steps you need to follow to get the best US stocks to trade.
As an investment, this should never be a criteria. If you want to buy a stock and hold it for a long time, you need to do a lot of research about the company. This study should show you the real valuation of the company. For instance, you should look at the cash flow and the assets and liabilities of the company. If the share price is well-priced, then you should buy it. For a trade, I recommend that you focus on companies that you know. Some of the most common companies are Google, Netflix, Facebook and Twitter. The benefit of trading these companies is that they are well-known and many investors are either entering or leaving the company. This creates volatility on the company. This volatility creates opportunities which you can maximize to boost your returns.
Consider the Price of the Shares
When you are trying to find the best US stocks to trade, you have to be careful. The face price of the shares does not mean a lot to investors. This is because the share price does not have an intrinsic value. For instance, a company such as Berkshire Hathaway has a share price of $235,000 and a market capitalization of $ 388 billion. On the other hand, a company like Alphabet has a share price of $749 and a market capitalization of $488 billion. As a trader, you want to trade a company whose share price is low. This is because the only way for you to make money is when the share rises. You don’t wait for a dividend. Selecting a company with a cheap share price will help you make more money per movement.
Ignore the Noise
As you try and find opportunities, you will hear a lot of noise especially from the penny stocks. Penny stocks are companies which trade for less than $5 a share. These are small companies that are valued at less than $10 million. The value proposition of these companies is that you can make a lot of money within a short period of time. You should ignore these companies and focus on stable companies such as GoPro.
Create a Small Group of Companies
You should not be tempted to day trade a lot of companies. Remember that too much of anything is poisonous. The smaller the group of your trading companies, the better it is for you. In fact, you can have a small group of about 5 companies that you will be trading with. The advantage of having a small group of companies is that it will give you a chance to understand these companies and their price movements. It will also help you be an expert in the small group of companies.
Best US Stocks – Useful Links
- Discover more about the best US stocks on CNBC
- Read Warren Buffett’s best US stocks to trade on TheStreet