My tutorial will teach you the best way to receive a buy signal. This stock signal app is free to setup.
Regardless, in this tutorial, I am going to teach you how to receive signals so that you can buy the right stocks.
The tool that I am going to share to you is easy to set up but you have to have a good trading strategy.
You can go to our recommended page to find out more.
To make this tutorial easy to understand, I have shared a simple strategy below, but do not use it in actual trading.
It is only part of my whole process
Let me tell you about my experience.
I had already learned a lot of trading strategies when I started trading because I had read a lot of books.
I knew that the application of knowledge was vital to my success. However, I did not understand how to actually do it.
Well, I wanted to filter good companies from thousands of stocks to invest. Besides, I did not have the right tools back then.
Watching the markets every minute is not possible for me during office hours because I am an employee.
So, I had to find a strategy that works well for me. Luckily, I stumbled upon Amibroker and Investing.com.
Let’s talk about the second one. However, if you want to learn about the first tool, you can go to the stock screener page.
Investing.com has been a blessing for me because it is free.
I believe that the right tools will reveal itself if you look for it. Thank God, I found it.
However, the tools are useless if you don’t have a good strategy.
After you read this post, you have to find a method that suits you, but it is not easy.
I recommend that you go to our recommended strategies page to learn more.
Buying Signals for stocks
Before we start, you must have a trading strategy so that you can use it later. In this case, let’s use this simple process.
- Price is within 20% from the 52-week high.
- Price to sales is below 10.
Let’s keep everything simple. We will not complicate this tutorial and play along. The first criteria will scan for stocks with strong momentum, and the second will find cheap stocks.
This strategy is for illustration only, so do not use it on your actual trading.
Why do I use 52-week high in my trading?
I use it in my strategy because it is universally known to all traders and investors. Unlike pure support and resistance levels, the value of this indicator is not subjective.
Well, I use it for my break out anticipation trades.
Some traders use it to gauge the volatility of the stock.
You can read more about it at Sapling. (Source)
You can use the difference between 52-week high and low to know the volatility of the stock. For example, a price change from $5 to $10 is a 100% move, which is high.
Volatility can be good or bad depending upon your strategy. Dividend investors look for low volatile stocks.
However, I use the 52-week high to find momentum.
Price to sales ratio is also important. Seasoned traders know that it is not good when the value is more than 10.
It is the multiple of price when comparing to sales.
I have written my explanation below. You can read it to know more.
Is it a good idea to buy the stock at 10x sales?
The worst drawdown is 81.37% and it is too high.
You can lose your trading account, and it may take a long time to recover.
stock signals app
To find good stocks fast, you need to have an online or offline stock screener.
Manual scanning of stocks takes time and I don’t want to waste my time.
You can use fundamental data in investing.com
If you like our post on Receiving a buying signal, please share it.
- Trading Strategies: Definitive Guides
- 6 Mean Reversion Trading Strategies(Stocks)
- The Complete guide To Scan For Momentum Stocks(With Free Tools)
- The Definitive Guide To Find Darvas Stocks(With Codes)
- The Definitive Guide To Find NR7 Stocks(With Codes)
- 5 Steps To Find Stocks with High Relative Volume
- How To Scan For Relative Strength(Secret Method)
- Maximum No. Of Shares You Can Buy: What You Need to Know
- Receiving A Buying Signal(With Screeners)
- RSI Moving Average: What Is It?
- The Definitive Guide To Find Less Volatile Stocks(With Free Tool)