Page 432 - THE MARKET WHISPERER

428 PART 12 - Choosing a Winner Stock

The conclusion is simple: for each day of trading you need to have a
list ready with stocks you have analyzed, which will prepare you mentally
for the market. These are the stocks which would offer the lowest risk of
disappointment and the highest chances of success. Later on, we’ll look at
several ways of searching for stocks.

Using Analysts’ Reports

A professional, experienced analyst who invests a good deal of time and
energy in searching for stocks will succeed far better than a new trader
with no experience. The success rate of Tradenet’s trading room analysts
is about 65%.

The disadvantage of relying only on the trading room analysts’ picks
is that it draws you into laziness and can create dependence. I know
traders who have been operating for years with only analysts’ reports.
They are pleased with their outcomes, but are constantly dependent on
someone else and will never learn to identify stocks themselves. It is an
unhealthy status, since your ultimate objective is to be independent. If you
allow someone else from now on to choose stocks for you, you will never
progress as a trader and gain that vital self-confidence and experience.

SMART You must learn to identify stocks yourself. It contributes
MONEY to your self-confidence, experience, and development as
traders.

I will waive my opposition to my recommendation only when you are
starting out as traders. I believe that initially it is worth being assisted
by the knowledge of a more experienced trader, but that would be for
one purpose only: to learn and understand why your mentor chose the
particular stock and how you can do that yourself. As long as you are
earning income from someone else’s recommendations, you need not give
up being assisted. However, always check well that the stocks chosen by
the analyst will not constitute more than half the trades you execute, and
compare your rate of success on stocks you have chosen with those chosen
by the expert. Your long-term goal is to improve your rate of success, to
reach that of the expert.

How does a daily analyst’s report look? Reports are adapted to the
nature of your trading. Swing traders use a report that analyzes up to
ten stocks each week, and intraday traders use a report that analyzes
up to ten stocks daily. The report contains a list of “candidates” for the