I have been analysing the market for over a year now but are not willing to buy shares as yet I dont know when and dont know what 2 look for can you experts please give me and the other beginners some pointers on what 2 look for and what 2 watch out for thanks
There's still a lot of danger out there, so keep watching. Maybe do some paper trading - practice buying & selling and see how you would have done. Also, read the books "Rule #1" and "The four pillars of investing". Maybe the others have suggestions for reading material. Don't try to get too clever, too quickly.
I support RichardW, I would also propose that you look at the Standradbank research and their buy and sell recommendations. Track the buy recommendations on paper an combine that with simple trend analysis. Find a strategy that suits your own profile by doing this before using real money and generating a real loss.
1. Define your own Trading System based on the time you have available to trade, your capital position, risk profile etc. Have a look at http://bigpicture.typepad.com/comments/files/turtlerules.pdf for a practical example of a system that works. Have a look at all the elements and define your own that works for you. I do not use this system, but studying this document gave me a lot of direction and confidence to trade my own system. 2. Test your system through paper trading. 3. Start trading and follow your system
If you are near one of the main centres the best thing you can do is attend the SFM courses (more than once if necessary). Apart from being excellent in content they will also help you to start to formulate what trading/investing strategies will suit you. Back test and paper trade those systems. Especially whilst you are still new to trading concentrate on a cross-section 6-12 top 40 stocks & become intimate with them.
This is, perhaps, the most useful and the safest way to find good shares. In simple terms, you must begin with the international economic scene and try to formulate a view on key indicators such as the oil price, the Dollar/ Euro exchange rate, the level of overseas interest rates, the level of world inflation, the gold price and so on. Then move to the South African economy and try to decide how these overseas influences will affect our economy. This obviously implies looking at our key indicators such as the level of domestic interest rates, inflation, the balance of payments, business cycle and so on. Then you must look at the individual industries within the economy and try to identify those that are doing well or are about to do well. Once you have found an industry that you like and then look at the specific shares in that industry. Finally, having chosen a share, you must choose a time to buy it. For example, you might decide that the oil price is about to fall heavily. This will affect the South African economy in a variety of ways. Gold is likely to fall (and hence gold shares), as are shares such as Sasol, Trans Natal Coal and other energy suppliers. The level of domestic inflation will also fall and this should benefit generalised industrial companies such as Barlow Rand and Remgro. A detailed study of such shares might then show that Barlow Rand is heavily oversold and due for an upward correction. Finally you will need to take a view on when exactly will be the best time to buy. At this stage, all this might sound like a tall order, but as you become more familiar with various forms of analysis and how the economy works, you will see that it is a very sound method. Hope this help,i`ve read it a in article