Success in the stock market starts with having an effective and easy-to-follow routine, backed by time-tested rules for when to buy, sell and hold.
[ibd-display-video id=2102289 width=50 float=left autostart=true] Based on over 130 years of market history, the routine below walks you through the three basic steps that will help you grow and protect your money over the long term. And with IBD, you'll find all the tools and S&P 500-beating stock lists you need to quickly and confidently follow those steps.
So take a minute to watch the video and go through the routine and buying checklist to see how the tools work together, and how they can help you become an even more successful investor.
For a real-world example of how it works, scroll down to see how you could have used this routine to spot Nvidia ( NVDA ) before it broke out and surged over 500%.
3-Step Investing Routine
1. Check Current Market Trends With The Big Picture And Market Pulse
Under the 'Market Trend' tab on Investors.com, go to:The Big Picture
The first step is to know what kind of market we're in right now. Is it time to buy stocks, or is it time to play defense and protect your profits?
Find out by checking the Market Pulse inside The Big Picture to see which of three possible stages the stock market is in right now.
CONFIRMED UPTREND • Best time to buy stocks
UPTREND UNDER PRESSURE • Proceed with caution• Be ready to take defensive action
MARKET IN CORRECTION • Avoid making new buys• Protect profits and cut losses short• Build watch list for next uptrend
Also see:Stock Market Today (updated throughout each trading session)
2. Find The Best Stocks To Buy And Watch With IBD Stock Lists
Under the 'Stock Lists' tab on Investors.com, go to: Stock Lists
The best performing stocks typically display seven common traits in the early stages of their big moves.
Using IBD SmartSelect Ratings and unique stock lists like the IBD 50 and Sector Leaders , you can quickly identify which stocks are most strongly showing those same characteristics right now.
Which Top-Rated Stocks Are In Or Near A Buy Zone Right Now?
Simply scroll through IBD screens to find highlights of top-rated stocks in or near a potential buy range . It's a simple, effective and fast way to build your watch list.
3. Evaluate Your Stocks And Plan Your Trades With Stock Checkup And IBD Charts
What's the most effective way to maximize your profits and minimize risk? Always check both the company's "fundamentals" (e.g., sales, earnings, products, industry trends) and "technicals" (e.g., price and volume action, support and resistance in the chart).
That combination gives you a major advantage over investors who only look at one or the other.
Stock Checkup gives you pass, neutral or fail ratings for the most important stock-picking criteria. Just enter the ticker for an instant diagnosis of your stock. ( See how to instantly diagnose your stocks .)
Before you buy a stock, use IBD Charts to make sure it's in a proper buying zone. And use charts to see the right time to take your profits and minimize risk.
Case Study: Nvidia
As you can see in the graphic below, in March 2016, self-driving car technology leader Nvidia showed how using this routine helps you identify the best to stocks to buy and watch.
Step 1: The Market Pulse showed the current outlook was "Confirmed uptrend" - the best time to buy quality growth stocks.
Step 2: By scanning the IBD 50 list of top growth stocks , you would have seen Nvidia highlighted, with analysis that showed it was near a potential buy point.
Step 3: You could have added Nvidia to your watch list and learned more about the company using IBD Stock Checkup.
Two weeks later, Nvidia broke out, launching a gain of over 500% in just 20 months. Note that the IBD 50 continued to highlight new buying opportunities in Nvidia as it made its big run and launched subsequent breakouts.
While not every stock featured in the IBD 50 and other lists will make that type of move, the case of Nvidia shows how using this routine regularly can help you quickly build an effective, actionable and high quality watch list.
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