How to choose stocks to invest profitably on eToro

BlogDecember 21, 2021

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Besides factors such as skills and trading strategies, good stock selection helps investors get successful buy/sell deals. However, finding a good stock is not easy, especially for beginners. To understand how to choose stocks to invest in effectively on the eToro platform, please follow the article below.

How to choose stocks to invest profitably on eToro

Criteria for stock selection

In fact, not everyone knows how to choose good stocks to invest ineffectively. To be able to choose a suitable stock code, you need to carefully study information about the companies issuing shares according to the following criteria:

  • Firstly, the criteria of enterprise quality, business results, and good profit give way to the tendency of enterprises to make profits.
  • Secondly, the strength of the business’s earning power at certain points in time is crucial in the investment decision-making process. If in times of economic difficulty and decline, the company’s profits are still maintained, proving that this is a business worth considering for its investment strategy.
  • Thirdly, criteria on dividends also need to be considered, maybe the dividend payout ratio is not high, but it must be stable and maintained continuously for many years. This can be a key factor reflecting the stability in business operations of the enterprise.
  • Finally, the quality of the enterprise’s assets is always what investors care about, especially the source of short-term investments. Even if the business of the business goes down, the good quality assets that the business owns need to be carefully studied. Products created by the enterprise are a solid foundation for the development of the company in the future.

Guide to investing in stocks on eToro

After you have chosen a good stock code, you need to choose a broker for yourself. Among thousands of brokers today, eToro is considered one of the most reputable exchanges, the first choice of stock traders. With a friendly interface, investors can easily execute international securities trading orders. After opening an eToro account, you can invest in stocks as follows:

Learn the basics of a stock ticker on eToro

When you open a stock ticker, you see some basic information about that ticker and 4 tabs: Feed, Stats, Charts, Research.

Top left corner:  The most basic information of the stock ticker is shown here, including:

  • Company name, stock code
  • Current price of stock ticker
  • Information about price provider, price unit, current transaction status.

Feed:

  • Information column on the right: Provides basic information about the stock code.
  • Information, investment ideas, comments on this stock code are posted by investors.
  • You can also create a new post to share about this code or share it on other social networks here.

Stats :

How to choose stocks to invest profitably on eToro
  • The most important parameters to know about a ticker and its business include last close price, market capitalization, intraday volatility, stock multiplier on earnings, 52-week price range, revenue, average volume, earnings per share, one-year return on investment, dividend yield on share price.
  • Universal time chart
  • Basic information about the company: Area of ​​operation, line of business, name of executive director, number of employees.

In addition, at the bottom, there is a financial summary as well as the profile of the business for investors to refer to.

How to choose stocks to invest profitably on eToro


Chart:

How to choose stocks to invest profitably on eToro

Here you can view past and current price history, monitor the stock’s charts on different time frames in real-time, set the chart appearance to your liking, and add indicators. Technical reports, providing graphing tools…
Research:
Research: Lists in detail all of the expert recommendations and advice for a given stock (buy, sell or hold) and their specific estimates for that asset’s price range (Note: For the Research function, investors can only use it after depositing money into the account).

How to choose stocks to invest on eToro

After you know how to choose stocks to invest in and find out for yourself the right stock code, you can proceed to invest/buy shares according to the following instructions:

Step 1: After you have selected the stock code, click the “Trade” button

How to choose stocks to invest profitably on eToro

Step 2: Enter the amount you want to invest, the volume of shares to buy, then place a stop loss and take profit order for your trade

How to choose stocks to invest profitably on eToro

Step 3:  After you have finished setting the transaction parameters, please click the “Set Order” button to send an order to open a trade. A window will appear confirming the information about the transaction you opened and after the processing is complete

So you have completed an order to buy shares. You can now return to the ”Portfolio” section of the main menu bar to review and see the stocks that have appeared in your portfolio.

Advantages of investing in stocks

Companies sell a stock because it’s a good way to get huge amounts of financial capital. However, the company itself must generate a lot of income to make it valuable. Issuing an initial public offering is very expensive. Then there’s no privacy, as investors review the company’s profitability and strategy every quarter. Companies have another way of obtaining financing is through personal loans or private investors, or through bonds, which are publicly traded loans. The advantage of stocks over bonds is that a stock does not require monthly interest payments.

Individuals use stock investments to enter the market because returns far outweigh other investments, such as bonds or commodities. Investing in stocks is a great way to ensure your investments outperform inflation.

* See more: The complete guide eToro from a to z

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