How to choose stocks is a complex issue.

In today's investment world, stock selection can be roughly divided into two factions: fundamental faction and indicator faction.

From entering the stock market for the first time to having some understanding and then doing well in speculation, every investor will go through the following three stages:

Phase 1: The period of confusion (standing)

This stage is the transition from earning money without knowing the reason to earning money with knowledge.

The basic situation is: at the beginning, it's basically listening to news, buying or selling usually doesn't have much reason, after a period of time, you choose a stock yourself, and then summarize some "rules" that may or may not work, and eventually generalize them.

Phase 2: Wandering, Confusing, and Difficult Period (Guarding)

This is the stage from being able to make money from the stock market to not making money as expected. Many veteran investors have been hovering around this stage for their entire lives. The specific manifestation is that he listens to news and looks at technical indicators. When others are trading stocks, he is willing to provide advice and strategies, but he cannot beat the market.

Phase Three: The Period of Quantitative Evolution Becoming Qualitative Evolution

Just by looking at financial indicators, you can also buy bull stocks. Just by looking at trading data, you can refine unparalleled stock performance like William Gann. All roads lead to Rome.

So, what do good stocks look like? Basically, they have two elements:

1. Supported by performance - whether in the past, present, or future, this company is valuable.

2. There is upward momentum - no matter why, give traders reasons.

The stock price is a summary of a series of buying and selling behaviors, which may seem irregular but are actually not. What you are buying is not the stock price, but the valuation change of a company.

What should we do when facing different factions?

1、 Choose fundamental stock selection:

Understand some finance, be able to read annual reports, at least know what profits and capital are;

Familiar with the industry in which one works, able to draw analogies and apply them to other situations;

The third is to develop a good habit of collecting information, often reading financial news and reports from listed companies.

2、 Choose technical indicators for stock selection:

Having some knowledge of mathematics or being sensitive to numbers, one should not be overwhelmed by addition and subtraction;

The second is to have an understanding of trading terminology and existing indicators, and be willing to conduct basic research, such as overlaying indicators on past trend charts to see how effective they are;

The third is not to always listen to the stories of stock gods, because they are really just stories.

Nowadays, stock investors have a problem: they like to spend money to learn from mistakes, they don't like to spend money to learn, and they don't even need to spend money, they just don't want to spend time. I don't know why I have developed a strange mentality of 'having classes and studying is useless'.

Losing tens or hundreds of thousands in the stock market is nothing, I would rather continue to believe in hearsay than learn more on my own. But a truth that remains unchanged until death is that only the skills you learn are truly yours. Learning is the fastest shortcut to success. Although it is a clich é, it always works. Let's encourage each other.