Keep It Simple Stupid! This is a philosophy I try to employ with other aspects of my life - partly, to be honest, because I'm a fairly lazy person by nature (like most men I can hear my wife saying in the background!). Also, like many people today, my days are already occupied with work, family and various other commitments, and so I would find it very difficult to find enough time to thoroughly research each and every share I wanted to spread bet. In any event it has been my experience (so far) that this is absolutely no guarantee of success when opening a new contract. Having said that I would never criticise anyone for selecting a share based purely on prolonged and intensive research - for me it's simply not worth the time and effort involved.
I'm not suggesting that contracts should be opened simply because "it seemed like a good idea at the time", or "uncle Bert swears by it", or it's "the share tip of the month." These methods are undoubtedly used by both investors and spread betters alike; however it is always prudent to carry out, at least, some very basic research. And this, combined with some simple chart analysis, really constitutes the bulk of my efforts prior to opening any new SB position.
In reality then I'm looking for favourable trends in the movement of share and/or index prices; personally, and with my level of experience, I prefer to deal only in share contracts. So, most of my time is spent looking at charts, and trying to establish a favourable point at which to enter a new trade. Even within a well established trend movement there can be a lot of volatility, and so it is extremely difficult (if not impossible) to find the ideal entry point. In any event trends (up or down) come in a variety of guises and whole books have been written on this subject alone. Anyway, the point is this: once the basics of chart analysis have been grasped then it becomes a very useful and simple tool with which to select new trades.
In truth I haven't been trading long enough, or successfully enough, to establish the validity, or otherwise, of this particular method of selecting new positions. As far as I can tell it is just as valid as any other method and, in common with other strategies, there will always be an element of luck involved - in my opinion anyway. In the final analysis ALL share/index selections are vulnerable to the vagaries of the markets; no matter how well researched a particular company it can easily succumb to a whole variety of political, economic and geographical events and/or news releases - which, I suppose, is where the 'luck' element enters the equation.
So there it is. For the moment, at least, I shall continue with simple chart analysis and superficial research in order to select new positions. If, over the coming weeks and months, I can establish good and valid reasons for changing my current philosophy then I'll certainly reconsider the situation. Somehow I feel that this is unlikely; however I'll be more than happy to be proved wrong, particularly if this means an earlier retirement!
Good luck with your trading, Big Al