Become 2020’s Next Big Main Street Trader
When you go to trade on the stock market, do you consider supply and demand before you invest?
And I want to teach you my top three secrets in determining which stocks are the best to invest in.
To be a successful trader, you need to keep these three keys in mind in order to bring in the kind of gains you want to have in 2020.
Check out this week’s video and find out what it takes to be 2020’s next big Main Street trader:
I want to give you 3 stock trading tips to make you a better investor and thus more successful in 2020. These tips are based on my GoingUpness strategy which is something that I came up with based on more than 20 years of investing, trading and speculating.
Tip 1: Picking a Stock (The Not-So-Secret, Secret To Investing)
The number one thing I am going to tell you about is something that very few people focus on. To make a successful stock market investment, you need someone to come and bid your stock higher. In the GoingUpness way of thinking, we call that inDemandness.
In other words, your stock needs to be in demand. Someone needs to like it a lot and come in day after day, week after week, month after month and year after year and want to buy it at rising prices. This may seem really obvious, but the vast majority of people never really think about this.
Like most common sense rules of investing, it is largely ignored.
When investors forget this rule they buy stocks that stay flat or even go down, some may never ever rise. There’s three things I can point you to as a way to measure this.
Focus on sectors of the market that are rising.
The market is broken up into a lot of different sectors. In previous posts, I have told you to buy the semiconductor sector using an ETF or a housing sector using an ETF.
You can find out more about sectors on websites like Investors.com, FinViz, Trading View and Bar Chart — you can use these to see the leading sectors of the market which is the first step to ensure you are stock trading in a sector that’s in demand.
Find a stock.
Once you pick the sector, there might be 100 or more stocks in that sector. Which stocks should you pick? This is going to sound simplistic, but again, common sense stock trading often is, we just forget the basic rules. What you want to do is pick the leading stock.
The stock that has the most demand, that is the most popular among traders, the ones people desire the most.
That’s the stock that investors and brokers are going to bid it higher in the weeks to come. How can you measure that? A lot of the websites mentioned about will tell you what the top stock is. However, I’m going to give you two additional ways you can do it.
Look at a stock that is making a series of 52-week highs.
I know this is counterintuitive to a lot of people. However, if a stock is not making continuous highs it’s no longer in demand. You should seek out stocks that are actually making new highs. I know this makes people hesitant and even fearful, but this is how smart investors make money in the stock market.
Find a stock that is being supported around its 10-day moving average.
Add the past 10 days of that stock trading and divide it by 10 using the closing price, you can find that the stock rarely goes below that price.
That’s a sign that the stock is in demand and people and investors are willing to come day after day and buy it. InDemandness is the number one way you can improve your trading and investing in 2020.
Tip 2: Picking a Company (Focus on Growth)
The second way to improve your investing in 2020 is to focus on growth, specifically sales growth Sales is the only thing that matters when it comes to a company. Other investors might tell you to focus on earnings, the balance sheet and things like that.
However, a growth investor, which is what I am and where the current market is and where there’s the greatest amount of money to be made today and in 2020, focuses on growth and sales growth.
What you want to see is rising sales growth. Not just sales growth. As a company goes from quarter to quarter and year to year, you want to see its growth or at the very least stability.
Now, no company grows in a straight line, but a company should be able to show you a rising trend of sales growth. Those are the companies that are going to be in demand. Those are the companies that are going to be at the top of the sector charts.
Tip 3: How Many Shares? (Supply & Demand 101)
Tip number three to get you phenomenal results in your investing and stock trading in 2020 is to focus on the number of shares.
In the GoingUpness way of looking at the world, the critical factors for me and for our investors and readers is demand and supply. We have largely dealt with the demand side in this article so far. We’ve looked at what is in demand based on price and rising growth.
The third thing you need to focus on is the number of shares.
Now this is a little tricky because there are two ways to measure it. You can measure it on an absolute basis by looking at companies and asking yourself if the number of shares are rising, declining or staying flat.
Generally speaking, if there are a lot of shares being pushed into the stock market that means there is a lot of supply. Unless there are equal amounts of demand or more, the stock is going to struggle to rise. You want to be aware of the number of shares that are out there and whether they are rising or falling.
However, there is a little twist to this.
Many fast-growing companies issue shares to fund their growth or as compensation to their employees. It is a bit of a relative calculation relative to their growth. So this last one is a little bit tricky. This is why folks like me have a job and have a following that pay to read our stock trading newsletters.
We are able to take all those factors and whittle it down to a simple buy or sell decision we tell you about on a regular basis.
If you are interested in getting a newsletter where someone is looking at the stock market using demand and supply and using GoingUpness, where we try to generate gains on a regular basis based on companies that are growing, check out Profits Unlimited service.
I can also tell you I have just released my first book which is also called Profits Unlimited: A Wall Street Insider Reveals the Secret to Life-Changing Wealth. It has my GoingUpness strategy in it.. You can get more on GoingUpness and how we look at the stock market through this book.
Editor, Profits Unlimited