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Picking Stock is a very complex process and the investors have different tactics to sell and buy them. However, it would be  a clever move to follow these general steps to minimize the risk of  investments. These basic steps will help you pick high performance stocks.

1.Pick the proper and apt time frame, planning some general strategy of the investment, will guide you to the type of stocks that you are planning to buy.  If you already decided to be a long term investor, then  you should find stocks that have supportable competitive benefits along with growth. The key for finding these stocks, is by keeping track of the historical performance of each stock over the past decades and do some simple analysis on the company. If you decide to be a short term investor, then follow  any one of the following strategies that you think easy to adhere.

a. Momentum Trading- keep a track of stocks, and follow the stock that increase in both volume and  price over the recent past. Do some technical analyses, it might support your trading strategy. I think you should look for stocks that showed confirmed stable and smooth rises in their prices in the history as well as in the present. The idea is, when the stocks are not unpredictable, you can simply follow the trend until the trend breaks.

b. Contrarian Strategy- look for over-reactions in the stock market. The stock market is not always efficient, which means prices always don’t represent the values of the stocks. When a company announces a news of lose or any bad news, people obviously panic and price often drops below the stocks fair value. So, in such cases plan beforehand whether a stock over-reacted to a news, look at the possibility of recovery from the impact. I think you should  find a list of stocks that have recent drops  in prices through candlestick analysis. If the stocks show candlestick reversal patterns, then I think, I will go through the recent news to analyze the causes of the recent drops to regulate the presence of over-sold opportunities.

2. Conduct researches-  I mean do a thorough study about the stock before investing. This will give you an idea to  select  stocks that is reliable with your investment time frame and strategy. There are   numerous stock screener on the web that can help you find stocks according to your needs, follow them.

3. Once you prepare a  list of stocks that you are planning to buy, spread them in a way that gives  you the greatest risk ratio. Follow the Markowitz analysis for your portfolio, it will help you  with  the proportions of money  assigned to each stock. This step is crucial because expansion is one of the free-lunches in the investment world.

These steps will encourage your knowledge about the financial markets, and would also provide a sense of confidence that helps you to make better trading decisions.