• (edited ) (+6/-0)

Due Diligence

Reddit's WallStreetBets craze has made it more clear than ever that you should never trust anyone posting DD who doesn't give you the very basic facts about a stock before presenting some very arbitrary hypothesis. Basically, you are wasting everyone's time by presenting a theory, if you aren't also prepared to share the basic facts. This enables everyone to quickly analyze and give their two cents.

Now, I'm not trying to make a movement, or anything. But, hypothetically, a day trading forum would insist on some type of basic format to facilitate speed of analysis.

In my mind, if you like a stock and you would like to share your feelings with other fellow traders, then your presentation should be titled the Stock Ticker Only and not stupid emojis and exclamation marks. It should include a dollar sign in front of it, because that is the standard to annotate a stock ticker on the Internet. There are a lot of SEO reasons for always putting a dollar sign in front of your tickers. Just do it.

If I see a post on a forum of a ticker I think I might like, I usually have to go through a series of sites and double check to see if this random Internet person even has the first clue. This is a huge waste of time.

As a group, it is better if one person presents proper DD, allowing casual observers to chime in with additional relevant information that may not be available at a glance.

The first thing I'm going to want to see is an Analyst Rating from someone reliable. The last thing I want to see is a screenshot of someone's trading account (99% fake) or a chart that someone has drawn on (also 99% $BS).

Analyst Rating

Generally, I recommend people start with TradingView, but never trust just one source. It so happens that TradingView is showing $GE as the highest volume ticker with a "Strong Buy" rating.

https://pic8.co/sh/TTsDfm.png

Let's start there.

Yahoo Finance is showing as "Overvalued". I prefer "Undervalued", but everything is Overvalued, right now.

https://pic8.co/sh/4uk82p.png

I also want to see a "Bullish" Stochastic and green arrows on the 3 Performance Outlook Measures.

I like this stock. If you are a brand new beginner, then pass if it doesn't also say undervalued.

At Finviz.com, we can see it was upgraded from "Sell" to "Hold". We also see the chart has an overall upward channel. These are both good signs. I'd prefer that Finviz was officially calling it a "Buy."

https://pic8.co/sh/74IzI3.png

Zacks is also calling it a "Hold."

https://pic8.co/sh/DI68Tu.png

Now, keep in mind; Analyst Ratings are slow. They are our starting point, only. In an ideal situation, you see a "Hold" and you are, next, vetting if it is about to pop into a buy. THAT is where you want in on a stock. You want your mind to make that premonition, and you start at the Analyst Rating.

The more analyst ratings you provide, the better, but three should probably be the minimum. It only takes like 10 seconds to grab a screen and pic8 it with the new "Paste Clipboard Here" feature.

https://pic8.co/sh/QeJRNa.png

Historical Charts

At the very least, I want to see the day chart, the week, the month, the year and the lifetime. That's 5 charts, minimum.

https://pic8.co/sh/y9lLH5.png

https://pic8.co/sh/lUd8Qq.png

https://pic8.co/sh/85pKMB.png

https://pic8.co/sh/mbqFfp.png

https://pic8.co/sh/wumbtV.png

https://pic8.co/sh/zGPFLA.png

It doesn't matter where you get the chart from. Lots of people chart in different ways. These views are from ThinkOrSwim. What we are looking for in these charts is beyond the scope of providing an example of how to present DD.

Note that you should know a thing or two about candlestick charts, as soon as possible, so you can avoid the obvious bearish patterns. Knowing what to avoid makes it really easy to rule out a stock. If you are trading day to day, then you need to be looking at day to day candlesticks.

If you are trading minute to minute, then the candlesticks are very useful to you, in the moment, at your computer, but useless to post on a forum because no one will be able to react fast enough.

https://www.investopedia.com/terms/c/candlestick.asp

Options Chain

As usual, it doesn't matter where you are getting your option chains, but I am looking for two things. High volume on calls. It just so happens that $GE is on Barchart's Unusual Options Activity. I'm starting to like this stock more.

https://pic8.co/sh/URO19o.png

Notice, of all the Unusual Call Activity, GE is high up on the list. Let's get a little more specific and look at the Options Chain. Let's go to the Yahoo view of the $GE Options Chain and notice that all the largest bets point towards $GE reaching $12.00.

https://pic8.co/sh/kc1OeS.png

At this point, I ask myself, "Can I make 1% gain from this stock in the next 24 hours?" That's about twelve cents per share. Yes. And, due to the analysts, even if I miss my target, it is an okay long term play. As a beginner... make sure you are only betting on small gains and only on things that will be fine, long term.

I am seeing that $GE will almost certainly meet the price target. I like this stock.

Recent News

What is causing the options to increase in volume?

https://pic8.co/sh/FtAnND.png

The dividend announcement is great news. This is starting to look like a stock I'm going to tell my kids to buy for a very long term hold. Most news is just fluff. Dividend news is real.

Only after knowing those items, can we confirm whether or not we also like the stock.

Save yourself time and money. Save everyone else time and money. If you are sharing a stock, then you are either, asking for advice, or you are trying to convince others to trade the stock. Hopefully, you take a look at a stock and think, "Hey, this one looks good. I'm going to buy it. Let's see what everyone else thinks."

I like $GE for a small gain. When presenting your conclusions, you should also be calling out an entry point and an exit point.

I would be comfortable putting 25% of my daily money in $GE at $11.75 as an entry point and hope for $11.99 within 24 hours of purchase. I would also hold a small portion of those shares at a higher limit order of $12.39 and an even smaller portion set for a long term hold with a sell limit at $24.99, in case it returns to it's former glory.

If there are strong sell indicators that occur after I've purchased the stock, then I will take a closer look at the option chains to see if I can't counteract a drop with some reasonable options to break even (not that hard to do) or even turn the profit around (if you're lucky).

That is really how you START doing DD

Everyone likes different buy indicators or sell indicators, so you should be calling out what you use so that others may learn and contribute. You can get really advanced and learn about things like Ichimoku Clouds or Dark Pools and share why you think they are important or relevant to your stock.

If you are doing this manually and find 4 stocks that you think will go up one percent, and there was a small group of people doing the same on Poal, I guarantee you would outperform Reddit's WallStreetBets because Poal is not as easily shilled. A group that just posted the right DD of good stocks, with an honest voting system, would actually do very well.

The ideal time to post DD for daytrading is between 08:00 and 09:30 market time.

#Due Diligence Reddit's WallStreetBets craze has made it more clear than ever that you should never trust anyone posting DD who doesn't give you the very basic facts about a stock before presenting some very arbitrary hypothesis. Basically, you are wasting everyone's time by presenting a theory, if you aren't also prepared to share the basic facts. This enables everyone to quickly analyze and give their two cents. Now, I'm not trying to make a movement, or anything. But, hypothetically, a day trading forum would insist on some type of basic format to facilitate speed of analysis. In my mind, if you like a stock and you would like to share your feelings with other fellow traders, then your presentation should be titled the **Stock Ticker Only** and not stupid emojis and exclamation marks. It should include a dollar sign in front of it, because that is the standard to annotate a stock ticker on the Internet. There are a lot of SEO reasons for always putting a dollar sign in front of your tickers. Just do it. If I see a post on a forum of a ticker I think I *might* like, I usually have to go through a series of sites and double check to see if this random Internet person even has the first clue. This is a huge waste of time. As a group, it is better if one person presents proper DD, allowing casual observers to chime in with additional relevant information that may not be available at a glance. The first thing I'm going to want to see is an Analyst Rating from someone reliable. The last thing I want to see is a screenshot of someone's trading account (99% fake) or a chart that someone has drawn on (also 99% $BS). #Analyst Rating Generally, I recommend people start with TradingView, but never trust just one source. It so happens that TradingView is showing $GE as the highest volume ticker with a "Strong Buy" rating. https://pic8.co/sh/TTsDfm.png Let's start there. Yahoo Finance is showing as "Overvalued". I prefer "Undervalued", but everything is Overvalued, right now. https://pic8.co/sh/4uk82p.png I also want to see a "Bullish" Stochastic and green arrows on the 3 Performance Outlook Measures. I like this stock. If you are a brand new beginner, then pass if it doesn't also say undervalued. At Finviz.com, we can see it was upgraded from "Sell" to "Hold". We also see the chart has an overall upward channel. These are both good signs. I'd prefer that Finviz was officially calling it a "Buy." https://pic8.co/sh/74IzI3.png Zacks is also calling it a "Hold." https://pic8.co/sh/DI68Tu.png Now, keep in mind; Analyst Ratings are slow. They are our starting point, only. In an ideal situation, you see a "Hold" and you are, next, vetting if it is about to pop into a buy. THAT is where you want in on a stock. You want your mind to make that premonition, and you start at the Analyst Rating. The more analyst ratings you provide, the better, but three should probably be the minimum. It only takes like 10 seconds to grab a screen and pic8 it with the new "Paste Clipboard Here" feature. https://pic8.co/sh/QeJRNa.png #Historical Charts At the very least, I want to see the day chart, the week, the month, the year and the lifetime. That's 5 charts, minimum. https://pic8.co/sh/y9lLH5.png https://pic8.co/sh/lUd8Qq.png https://pic8.co/sh/85pKMB.png https://pic8.co/sh/mbqFfp.png https://pic8.co/sh/wumbtV.png https://pic8.co/sh/zGPFLA.png It doesn't matter where you get the chart from. Lots of people chart in different ways. These views are from ThinkOrSwim. What we are looking for in these charts is beyond the scope of providing an example of how to present DD. Note that you should know a thing or two about candlestick charts, as soon as possible, so you can avoid the obvious bearish patterns. Knowing what to avoid makes it really easy to rule out a stock. If you are trading day to day, then you need to be looking at day to day candlesticks. If you are trading minute to minute, then the candlesticks are very useful to you, in the moment, at your computer, but useless to post on a forum because no one will be able to react fast enough. https://www.investopedia.com/terms/c/candlestick.asp #Options Chain As usual, it doesn't matter where you are getting your option chains, but I am looking for two things. High volume on calls. It just so happens that $GE is on Barchart's Unusual Options Activity. I'm starting to like this stock more. https://pic8.co/sh/URO19o.png Notice, of all the Unusual Call Activity, GE is high up on the list. Let's get a little more specific and look at the Options Chain. Let's go to the Yahoo view of the $GE Options Chain and notice that all the largest bets point towards $GE reaching $12.00. https://pic8.co/sh/kc1OeS.png At this point, I ask myself, "Can I make 1% gain from this stock in the next 24 hours?" That's about twelve cents per share. Yes. And, due to the analysts, even if I miss my target, it is an okay long term play. As a beginner... make sure you are only betting on small gains and only on things that will be fine, long term. I am seeing that $GE will almost certainly meet the price target. I like this stock. #Recent News What is causing the options to increase in volume? https://pic8.co/sh/FtAnND.png The dividend announcement is great news. This is starting to look like a stock I'm going to tell my kids to buy for a very long term hold. Most news is just fluff. Dividend news is real. #Only after knowing those items, can we confirm whether or not we also like the stock. Save yourself time and money. Save everyone else time and money. If you are sharing a stock, then you are either, asking for advice, or you are trying to convince others to trade the stock. Hopefully, you take a look at a stock and think, "Hey, this one looks good. I'm going to buy it. Let's see what everyone else thinks." I like $GE for a small gain. When presenting your conclusions, you should also be calling out an entry point and an exit point. I would be comfortable putting 25% of my daily money in $GE at $11.75 as an entry point and hope for $11.99 within 24 hours of purchase. I would also hold a small portion of those shares at a higher limit order of $12.39 and an even smaller portion set for a long term hold with a sell limit at $24.99, in case it returns to it's former glory. If there are strong sell indicators that occur after I've purchased the stock, then I will take a closer look at the option chains to see if I can't counteract a drop with some reasonable options to break even (not that hard to do) or even turn the profit around (if you're lucky). #That is really how you START doing DD Everyone likes different buy indicators or sell indicators, so you should be calling out what you use so that others may learn and contribute. You can get really advanced and learn about things like Ichimoku Clouds or Dark Pools and share why you think they are important or relevant to your stock. If you are doing this manually and find 4 stocks that you think will go up one percent, and there was a small group of people doing the same on Poal, I guarantee you would outperform Reddit's WallStreetBets because Poal is not as easily shilled. A group that just posted the right DD of good stocks, with an honest voting system, would actually do very well. The ideal time to post DD for daytrading is between 08:00 and 09:30 market time.

[–] • 1 pt

Stock trading is a quantitative game today. Fundamentals of the company don't matter very much except as they influence HFT algos. Analyst ratings also don't mean much because they badly lag the market.

To me, what's important is momentum because hedge funds mostly drive the market. You want to be on the right side of the bet. If you notice what they are doing, you essentially want to front run their trades to the extent you can. Being able to read charts is important. Understanding the various charting techniques is important.

News influences HFT algos to some extent. By the time you read the news headlines, HFT algos have already priced that in. Historical charts only have significance 2-3 months, in my opinion. The further back you go, the less influence the data has. I like a 90 day moving average to make buy/sell decisions because I want to know the standard deviation of the price. If you don't know what that is, i highly recommend you study it to understand its importance.

Be careful not to get caught up getting excited about squeezing short sellers. $GME was being played on both sides by hedge funds. If you happened to get in on the right side of the bet in time, you could have made money. You would also need to know when it was time to get out. Many people got hurt on this by getting in or out at the wrong time.

Indeed. Analyst Ratings, to me, are just a starting point and it is very important to pay attention to the timeframe in which the analyses was submitted. Sentiment trading is growing and will continue to grow as retail traders pour into the market, making a lot of fundamentals moot. You still need the fundamentals, though.

I have a few feeds like https://old.reddit.com/r/StonkFeed which just cycles sentiment posts. StonkFeed helps me identify the pump and dumps early, because you will start to see the same ticker pop up across multiple subreddits as the shills get activated.

I largely agree with you on charts, but there are sometimes surprises on lifetime charts that you don't want to miss. At this moment, I definitely want to see the chart back to January of 2020, of any stock before I buy it, so that I can see how the stock reacted to lockdown hysteria.