Finding Profitable Investments

Finding Profitable Investments
By
www.CandlestickForums.com

Finding profitable investments requires
an investment strategy, skill in both
fundamental and technical analysis, and
time.

Although stock tips can be a fast way to
finding profitable investments wise
investors and traders will want to be

able to confirm with fundamental
analysis and technical analysis when
picking stocks from even the most
reliable source.

Using technical analysis tools such as
Candlestick pattern formations, a trader
can anticipate market reversal and
market trends before they happen.

In long term investing one seeks to find
stocks with years of profit potential.

Nevertheless, long term investing can be
much more profitable when the investor
uses Candlestick analysis to buy stock at

the most advantageous price and sell
stock at the best price when a market
rally has run its course.

Investment strategy will depend upon
investment goals.

If one is looking for short term profits he
will pick different stocks than if he is
looking to set up a balanced stock
portfolio with retirement in mind.

Finding profitable investments must
always be balanced with risk
management as a single loss in one

stock can erase all of the work of
balancing a stock portfolio with stock
picks from various market sectors and

technical stock analysis with Candlestick
patterns to optimize profits.

The investor will want to decide on a
level of risk he is willing to incur in
finding profitable investments.

Often times the larger profit potential
lies with riskier stocks. The long term
investor as well as the day trader can

commonly limit his risk by close
attention to market sentiment using
Candlestick chart analysis.

In using fundamental analysis for finding
profitable investments the investor looks
to the price to earnings ratio to
determine if a stock is fairly priced.

He looks for a margin of safety such as a
cash reserve or unencumbered property.

The investor also looks for intrinsic stock
value. This is the company’s discounted
forward looking income stream.

Fundamental analysis seeks to anticipate
how a company will be doing in the near
term as well as the more distant future.

For example, a startup biotechnology
company may have one great product.

If that product passes all of the tests for
efficacy and safety put in place by the
Food and Drug Administration the
company may reap substantial profits.

However, if other companies are on the
verge of developing similar and even
more effective drugs the first company’s
exclusive profits could be limited to a
few years.

Investors use technical analysis to gauge
market sentiment.

n the vast majority of cases the
fundamentals that drive eventual stock
price are discounted or taken into
account by the market very quickly.

In our electronically driven world
information passes in less than a
heartbeat.

Thus the task in day trading as well as
long term investing is to read the
market.

Because price patterns in markets tend
to repeat themselves finding profitable
investments is possible in reading the
market reaction to changes in
fundamentals.

No matter how well versed the investor
is in the fundamentals of a stock, using
technical analysis with Candlestick

pattern formations will most commonly
help him buy and sell stocks at the most
optimal prices.

Finding Profitable Investments

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Finding Profitable Investments