Screening for Potential Trades

Discussion in 'Trading' started by bluedemon77, May 21, 2006.

  1. bluedemon77

    bluedemon77 Guest

    I'm a newbie that has only been trading for about six months. My strategy has been to select stocks for my watch list that have a history of solid fundamentals (earnings growth, solid balance sheet, increasing cash flow, etc.) and then watch the charts to find suitable entry and exit points. The more I trade, however, the less it seems the fundamentals have to do with the stock price. Stocks that should be real dogs because of their lousy fundamentals and incompetent management end up being superstars as far as the market is concerned. In fact, I tried to look for the companies with the worst fundamentals I could find in order to find shorting opportunities and the list I came up with ended up having charts that were for the most part no worse than everything else.

    Do fundamentals make any difference, i.e. is there any value in limiting trades to stocks with good fundamentals?

    If not, how do you all screen for potential trades? I've tried using Trade Ideas, but I haven't had a lot of luck with that. Do any of you use Trade Ideas and if so, what kind of setups do you look for?
  2. it depends on u time horizon...if a stock sucks big time cuz of bad earnings, orrible prospects, zero cash flow, etc...sooner or later reality is gonna catch up with price; obviously short term, weak or troubled stocks attract a lot of speculation and u can expect 'em to go vertical big time, at least intraday on in da space of a week or 2.
  3. pattersb

    pattersb Guest

    I'm pretty much in your same boat. The remarkable thing I discovered is how prices are influenced by geometry.

    would never has guessed a year ago ...

    efficient markets my arse. on a day-to-day, the markets can only arrive at a very rough guess as to the value of a company.
  4. i think it is all down to competition and speculation...if it was so easy that a poor performin' stock declines in value accordin' to u short term expectation everybody wud be makin' money, innit[?]