Why is stock selection process important to you?

Discussion in 'Stocks' started by dreamstrade, Feb 14, 2013.

  1. Hi everyone,

    New to the Elitetrader, and want to share something about my experience with stock selection. I hope you like it and open to take any suggestion on this topic.

    We have to make various decisions on daily basis. Some people enjoy the decision making process, while some people just hate to be part of the thinking process. I personally belong to the process-enjoy group. I also didn¡¯t think that process-hater group people are bad, I respect them. It is a norm in the universe. We are different and that is the wonder of our world.

    How is this related to stock selection? Base on my personal experience in trading and investing, I think decision making process played a critical role in the successful investment and trading. I bet that you would think ¡°I know this already.¡± I am not here to show off something new that I just discovered it. My intention is to share my experience on this topic.

    I believe most people start off their ¡°investing or trading career¡± by blindly choosing a stock or buying a stock advised by other people, could be a broker, a professional on media or a friend.

    There was not much thinking process involved because at beginner period, we don¡¯t have enough knowledge to make such decision. We use other¡¯s ¡°experience¡± to make up the thinking process. As time goes by, hopefully you continue to learn from different resources to enhance your knowledge tank so you can come up with your own idea. The idea of selection can be applied to other financial products as well and choosing stock for the article because I began my career with it.

    After spending a meaningful of time to study the financial markets and had some investing/trading records, you probably started to wonder why you are not doing well as you have expected. You started to rationalize the market with reasoning, demand for an explanation behind the move. Your vision blurred by unlimited information. Some people heard of Holy Grail¡_..

    All these things traced back to the decision making processing. Those process-enjoyers would be discouraged with unmatched result, they researched well but things went other way. Process-haters would be cutting back their time spent on the research if they don¡¯t see the result.

    My solution to this selection process issue is to focus on what is important. We are dealing with endless resources every business day and all those information are trying to say ¡°I am important and must know.¡±

    The real important elements in the process included: knowing yourself and figure out what type of financial products and methods fit you best. Market is always open and infinite combination of opportunities existed. No one can capture all of them. Every business day you can see different financial products featured on the media. It could be a hot IPO, a high flying stock, new high price in gold or a multi-year low of U.S Dollar. If you not focused on what is right for you, to get lost in the information stream just a matter of time.

    To be continued¡_¡_.
    :) :D
  2. I just stick to trading SPY and IWM + options. I have no time for all that nonsense and risk.