I ask you one simple question. I give you $200 and ask you to select a stock that can turn this $200 into $1 Million in the next few months to a year. Can you do that? Definately yes, if you know the art of scientifically selecting microcap stocks! Here's how an ordinary investor can cash on huge profits! You must be thinking how do you find such stocks that can make you rich. You can do this by following a 4 step investing system.
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You need to follow a systematic approach in your stock selection. First, you need to be very clear about the market sentiment. You need to know whether the market is bullish or bearish. You usually go long in a bullish market and go short in a bearish market. But how do you measure the market sentiment. Most of the stock exchanges in the world have a stock index associated with them. For example, NYSE has the Dow Jones, London Stock Exchange has the FTSE 100 whereas the Paris Stock Exchange has the CAC. These stock indexes are used to measure the market sentiment. For example, if the Dow Jones Index rises by a few percentage points, NYSE is considered to be in a bullish mood.
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But measuring the market sentiment is not as simple as taking a look at the stock index. Let's use an example to elaborate on it. Dow Jones is a price weighted stock index based on only 30 stocks. This means that it is heavily influenced by the prices of those 30 blue chip stocks. But there are thousands of stocks listed on NYSE. So definately, it is not a true measure of the market sentiment.
Take another example. This time we take a look at S&P 500 Stock Index, this is a world famous stock index. It is considered to be a barometer of the US market sentiment as it is a value weighted index based on 500 stocks listed in different US Stock Markets. These 500 stocks are considered to be diversified enough, so is it really accurate? No. it is not either! Infact, it is heavily influenced by 50 stocks included in it. These 500 stocks are responsible for half the movement of the S&P 500 Index.
So what to do then! What you need is how to measure the actual strength or weaknesess of the stock market. Then drill it down to weak or strong industry sectors. After that you further need to drill it down to the individual stocks that have the highest potential of giving you maximum returns.
Once, you have identified the super stocks, you can build your portfolio in such a manner that your risk is hedged and your profits are maximized. So if you have a system that can give you the best stocks and you know how to build your portfolio with those stocks, you can get incredibly rich without ever doing anything. This is the essence of investing! Follow this system and you can turn $200 into $1 Million over and over again!
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