News, sentiment and gossip drives the markets. It always has, it always will.
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Stock message boards are the beating heart of stock trading, but how can you make money from these seething investing arenas?
I’m Clem Chambers and I run some of the biggest stock message board on Earth. I’ve been doing this for over 12 years, not just in the US with Investors Hub, but globally with various countries for ADVFN inc UK, Brazil, Japan and many more.
My best seller 101 Ways to Pick Stock Market Winners covers message boards, so here are my top 5 rules to make money trading stock message boards.
Rule 1.
Do not believe anything you read on a stock message board.
People are simply not right more than half the time when you measure their opinions. A message board is not a tip sheet, nor should you believe any of them either. Think of a message board as a river with a gravel bed. In there somewhere are nuggets of pure gold. You need to be careful, diligent and hard working to get the gold out and it can be hard work. But the gold is there and it can be fun getting it. However be very careful not to be swept away and certainly don’t believe any signs that say “gold here.”
Rule 2.
Madness is badness.
The more exciting the talk about a stock, the more likely the stock will blow you up. Read, enjoy but don’t get sucked in to stock mania. The crazier the talk, the more likely disaster lies ahead. High risk, short life traders are hypnotised by trading hyping sirens and simply can’t resist being shipped wrecked by them. As they head for the rocks they let off huge amounts of noise. Don’t listen to any of it.
Rule 3.
Find a good stock, then look it up on a message board. Don’t do it the other way round.
If you are attracted to a stock, read the message boards about it. Let the board give you the back story of the stocks history. Read the messages from 5 years ago, up to today. It might be an unreliable story when it was written but that comes out in the wash. Reading the posting history will give you more information than you would possibly get from the news archives and will give you a feel for the personality of the stock and its investors and traders. The past will give you a feel for your chances of success.
Rule 4.
People talk quietly about good stocks.
No one feels the need to talk up a good stock that is rising. So watch out for message boards about companies where the share is going up and not a lot is being said. While crazies are attracted to wild disastrous stocks, smart investors are bedded down in boring equities and unmoved to tell the world. Be on the lookout for stocks with calm laid back posters, shooting the breeze. This composure is a clue to the state of their investments.
Rule 5.
Keep an eye on Gurus.
Bearing in mind the previous four rules, find and track guru posters. Don’t jump into their stocks, but instead see if you can learn from their skills. Keep track of their ideas and see if they work as time passes for new stocks. There is no rush to emulate; there is always the next investing and trading opportunity around the corner. What you need is to learn ways to pick and trade stocks, not names of stocks to bet your money on. Follow and learn the techniques of Guru Traders and learn how to pick your own winners.
Message boards are powerful tools. The trouble with powerful tools is they can easily be mishandled and wreck terrible damage!
The flip side is they can lever you up to achieve great things, as such you need to show caution and diligence and if you do, you will do well.