3 Top Stocks That EVERY Trader Should Follow – FB TSLA GS

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The majority of traders over-trade, over-analyze and generally make things way too complicated. The mystery of making money in stocks must have a deep and complicated answer, right?

3 Top Stocks That EVERY Trader Should Follow - FB TSLA GSWrong.

After nearly 20 years as a trader, analyst, investment banker and money manager, I can tell you that what’s keeping most people from making money in the markets is largely a function of having a repeatable process in place and keeping it simple.

One of the core qualities in successful traders and investors that I have seen throughout my career is the ability to stick to a system, remain patient and otherwise stay true to entry and exit points. Aside from this, though, by far the most common trait I see in successful traders is the art of keeping it simple … and this begins with a focus on only one or two “strategies” and a set basket of stocks.

It’s easy to get overwhelmed with data and trade ideas from every corner. But successful traders know how to eliminate the noise and focus on a basket of stocks that eIn the information age it is easy to get overwhelmed with data and trade and investment ideas from every corner. Successful traders however know to eliminate the noise and focus on a basket of stocks that a) continually act as important tell-tales for the broader stock market, or sector or industry, and b) often offer reliable buy or sell signals.

For me, the three top stocks every trader should follow are Facebook Inc (NASDAQ:FB), Tesla Motors Inc (NASDAQ:TSLA) and Goldman Sachs Group Inc (NYSE:GS).

Yes, my entire focus basket of stocks is much larger, and the components of this list will change over time. But these three stocks continually serve as great leading indicators, act well technically and offer good risk/reward trading setups.

Top Stocks That Every Trader Should Follow: Goldman Sachs Group Inc (GS)

Goldman Sachs GS stock chart
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Investment banking giant Goldman Sachs (GS) is at the center of the finance industry. Its exposure to corporate activity — ranging from mergers and acquisitions to capital markets activities — spans into just about every industry imaginable.

So, when corporate finance activity and all that goes with it begins to pick up after an economic slowdown — or conversely, begins to slow down after a prolonged economic expansion cycle — Goldman Sachs as a firm will know about it well ahead of time.

Luckily for traders and investors, Goldman tends to provide early signals for economic cycle tops and bottoms, as well as nearer-term gyrations in the broader market.

Take the broader stock market lows in 2009 for example. Shares of GS stock actually bottomed in late 2008, several months before the broader stock market did. At that time, Goldman signaled strong bullish reversals that allowed aware traders to get long the stock for big gains. The same once again happened in 2015 when GS stock topped in June with a big and obvious bearish reversal and quickly began to notably trend lower. Meanwhile, the U.S. stock market didn’t begin to accelerate lower until later in the year/early 2016.

Finally, from a technical perspective, GS tends to behave well, reacts to its near- and medium-term moving averages and generally gives fairly clear signals as to its intended near- to medium-term direction.

Top Stocks That Every Trader Should Follow: Facebook Inc (FB)

Facebook FB stock chart
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Facebook Inc (FB), aside from obviously being a cult stock and trend-follower favorite, also is at the center of the social media mega-trend. And I believe it’s just in the early stages of what this trend will ultimately become.

By owning other cult apps such as Instagram and WhatsApp, seriously playing in the virtual reality future with its acquisition of Oculus and having no fear of making other strategic acquisitions, Facebook is a believable growth story that many investors can see.

Catching mega-trend stories by essentially trend-following one or two stocks at the core of these stories is a simple yet effective way to have a good hit rate in your trading and investing activities.

Like all three stocks on this list, FB has a ton of liquidity in its stock and options, and from a news-flow perspective, it offers plenty of opportunities that active investors can capitalize on.

Lastly, FB stock acts well technically, which is to say that it respects its near- to medium-term moving averages, and while it can rally sharply, those rallies tend to lead to good consolidation phases that keep Facebook from overheating too much.

Top Stocks That Every Trader Should Follow: Tesla Motors Inc (TSLA)

Tesla TSLA stock chart
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Much like Facebook, Tesla Motors Inc (TSLA) is at the center of a mega-trend growth story.

Car travel of the future increasingly looks to be both electronic and automatic, and more importantly, this is just beginning to resonate with the investing public. There will be bumps in this mega-trend along the way, but as a general theme, it should have many years to go still.

Aside from the mega-trend backdrop is the allure of Tesla founder and CEO Elon Musk, who thus far seems to have the rare quality of turning to gold nearly everything he touches.

TSLA stock is also a favorite among the trend-following crowd and has a ton of liquidity in both the stock and its options. Unlike Facebook, TSLA stock tends to see severely overbought and oversold readings from time to time, but those always end in dramatic bullish and bearish reversals and thus offer active investors and traders tremendous opportunities for high probability trades.

Last but not least, like the other two stocks, Tesla is plenty in the news and thus offers news-driven pops and drops that often also match up with technically significant levels.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/03/3-top-stocks-trader-fb-tsla-gs/.

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