Pull up a chair, here is how I trade. I'm including a horsetrack analogy.
First, I trust "technical" stock analysis (cold, calculating) more than I do "fundamental" (warm, idea driven) analysis... but both have value.
The difference between the two schools is this:
"TECHNICAL" analysis is to value a stock by how it's trading ... (like judging a horse race by how the odds fluctuate from the betting crowd. If you think a horse has a 50/50 shot at winning but the crowd thinks otherwise and it's at 4-1, you make the bet. If the crowd has it at even odds or less, you don't make the bet.) ... to keep a long story short, technical analysis values people putting their money where their mouth is.
"FUNDAMENTAL" analysis brings more story into the equation - Wall Street analysts judge include a great deal of what a company says about itself in assessing its stock. I believe that a company will ALWAYS fudge the story to make itself seem as attractive as possible - there is, in fact, tons of b.s. to sift through, it's part of the game. (I liken this to judging a horse race by the morning line. LOL.)
One way (besides word of mouth) to find names of stocks to follow is to monitor Wall Street analyst upgrades - (upgrades/downgrades are freely available: Yahoo Finance / CNBC / thestreet.com / bloomberg.com etc. all have this)
I also have a friend whose company is a customer of Lazard (
http://lazardcap.com/) - he sends me their institutional research, so I'm biased towards that company's research.
THUS, I use fundamental analysis prospect names to trade. I see what stocks are being praised and which ones are being trashed.
But I need much more than this, so I cross-reference stocks I'm interested in with an equity ranking service.
On it I create my watch lists of stocks, and then get all alerts for the system's buy/sell/neutral signals - and some other helpful, yet standard, services.
But what I rave about are the short-squeeze lists - stocks populate the list every day before the open, the technical analysts identify stocks that are a) behaving solidly and b) have heavy short interest.
The idea is that as the stock trades higher, people who are short will cover their positions (to avoid loss) and drive the price higher.
I find what I deem the "best ofs" on that list (say 3 or 4) and circle back and add all to the monitoring and cross-reference again its sector ... and if the sector is well positioned technically, I'll buy the stock and set my own exit level.
*** And here's something important about stocks, I believe the secret to making money is an open secret and J.P. Morgan himself is the one who told it. Someone asked him what was the secret to his success and he answered: "I always sold too early" - meaning he was quick to realize a profit and never sat around waiting for his positions to go to the moon.
SO I constantly maintain the discipline out of getting out of a stock, even when I feel like a champ and think it's going higher. Realize the profit and move on! If you fall in love with your stocks you're toast.
It would be like betting the same team every week no matter what.