On the Indonesia Stock Exchange (IDX), there are many choices of stocks that you can buy. However, with limited capital, you should be able to choose some good stocks to buy.
I often get questions from fellow traders: “Mr. Heze, what are the criteria for a good stock to buy? Because often the stocks that I buy always fall in price.”
In the world of stocks, questions like these are questions in too broad a context. The criteria for a good stock are actually quite objective. Each of you must have different criteria, standards, types of trading, so it could be that your criteria for good stocks are different from those of other traders.
But there are some analyzes and considerations that you need to do so that you can find out the criteria for which stocks have the potential to generate profits. To find great stocks to buy, consider the following:
1. Technically good stocks
Technically good stocks are stocks that are feasible and good to buy, especially for stock trading. There are many technical analysis patterns that illustrate the tendencies of a stock. Also learn: The Stock Book Full of Technical Analysis Practices.
Technical analysis that is formed on the stock chart, can describe the trend / psychological market at that time. There are many technical analysis patterns that reflect a potential upside in stocks such as psychological support-resistance, candlestick-indicator combinations, chart patterns. Read other interesting articles on Ivanweb
2. Liquid stocks
Liquid stocks are better stocks and have less risk, because liquid stocks have more stable price movements, are more traded (so that the ups and downs are clearer, technical patterns are also easy to analyze), and psychologically traders will be calmer when buying liquid stocks.
Liquid stocks, for example, are LQ45 stocks, which are stocks that have thick bid-offers, are widely traded, whose stock price charts form clear patterns.
In contrast, stocks that are not liquid, are stocks that are risky to buy. Even though these stocks have a chance to rise tens of percent a day, the risk of falling tens of percent a day is also quite large.
Illiquid stocks have an irregular pattern of price movements, and are of little interest. For more details, you can study my post here: How to Distinguish Liquid Shares and Non-Liquid Shares.
So in choosing good stocks, don’t reverse the concept. Many traders who buy stocks are illiquid because they think that profitable stocks are stocks that can go up quickly.
This assumption is not quite right. If you really want to find good stocks to trade, even for a certain time, choose stocks that are liquid.
3. Shares whose companies are fundamentally good
Good stocks to buy are stocks whose companies are performing well and are well established. That is, the role of fundamental analysis is very important to find stocks that are worth buying.
You can learn fundamental analysis to find good stocks, for long-term storage here: Beginner – Expert Stock Fundamental Analysis.
Companies that have healthy financial performance, fair stock valuation, pay regular dividends, excel in the industrial sector are good criteria for stocks to buy. Companies on the Stock Exchange that have good and superior performance in the industrial sector include BBRI, BBCA, TLKM, UNVR, ICBP and others.
So if you have stock investment goals, choose good stocks based on fundamental analysis. Read other interesting articles on Ryudhapp
4. Current stock market conditions
Good stocks (especially for short-term trading), should also take into account the current market conditions. The stock market is bearish, making many stocks whose prices continue to fall, and vice versa.
So determining which stocks you want to buy, you also have to consider market conditions. If the market is bad, it is very possible that liquid stocks will continue to fall in price.
As a stock trader / investor, you must also pay attention to momentum trading, carry out proper capital management, because good stocks to buy are often created from the right combination of analysis and trading momentum. Also learn: Trading Strategies When the Stock Market is Strong Bearish.
Maybe that’s all I can say in this post. Through this paper, it is hoped that you already have a reference / guideline for independently selecting good stocks to buy.
Basic Stock Trading Techniques
The majority of people who open an online trading software account, generally aim for SHARE TRADING (buying and selling stocks for the short term). However, many traders don’t understand what to do when dealing with the stock market, because there are a lot of moving stock prices. On the one hand, you have to choose only a few stocks that are profitable.
Therefore, as a stock trader you are not advised to trade / buy stocks if you do not understand the knowledge of stock trading, which are ways to find good stocks.
Before trading, first understand the basic techniques of stock trading so that you can choose good stocks to buy. What are the basic stock trading techniques that you should master? Let us discuss.
Read the chart
If your goal is to trade stocks, then you must understand how to read stock charts. Basic stock charts are your ability to read: Candlesticks, basic (general) indicators, resistance support and trend analysis. If you can read the chart, you will find it easier to select stocks that have the potential to go up.
Understand the stock bid-offer
The bid offer is a basic technique for trading stocks. If you cannot read and interpret the bid offer for trading, you will be confused about the stock price you should buy at that time.
The bid offer is a queue of share prices. If you understand the correct queue for stocks, you will not be wrong to place buy and sell orders for your shares.
If you read a stock chart, this must also be balanced with your ability to read the bid-offer, because the bid-offer is also part of the candlestick.
If you are a typical day trader (you want to buy and stock within 1-2 days), then you must understand the bid-offer analysis, because bid-offer can also be used to find good stocks in the short term for intraday trading. .
Advanced technical analysis (Technical analysis for trading strategies)
Once you understand the basics of reading charts and reading bids, you should understand advanced technical analysis. Advanced technical analysis is: Analysis of chart patterns, candlestick patterns, practice indicators for trading.
You should start practicing a combination of simple technical analysis that can generate profits because there are many technical analysis. There is technical analysis which is easy to use, there is technical analysis which is very complicated to implement.
As a trader, you must be able to use simple technical analysis and suit your trading character.
Screening of shares
Stock screening means CHOOSING SHARES. Choosing stocks is a basic technique of stock trading. This is because as a beginner trader until you become an expert trader, you must be able to select several profitable stocks from hundreds of shares on the Stock Exchange.
Many novice traders don’t know what stocks to buy, because traders don’t learn analyzes for screening (selecting) stocks. So, learning technical analysis must also be accompanied by understanding and proper stock screening practices.