I don't think there is any secrets for a trader.
To me it comes down to 1 thing LUCK
IMO any stock is a gamble
The reasons for my statements are as follows-
1. Correction/crash predictions
Can anyone on this forum honestly say they predicted the last correction/crash 6 months ago? In many cases the signs are hard to read, with little to no time to react. I own property and the signs of a slowdown are much easier to read also you have more time to act.
How many of us have been burnt by so called "blue chip" shares like ABC,Centro,AMP ect in the past? The fact is by the time the bad news is released the directors have sold out and jumped ship, leaving the mum and dad investors out of pocket.
3. Sector price movements
It only takes 1 heavyweight stock for it's own reasons to fall, then the rest of the sector will take a hit.
4. Speculation price rises
Companies rise on speculation, without any earnings or evidence to support.
FMG reported net loss of 68.43m last year and is a $10 dollar stock. Aoe trading @ 72.27 PE ratio....
5. Good news/stock drop
Companies can report good news and earnings guidance only to see the stock price drop. An example here - I own WOW which reported a jump of 20% EBITgrowth and is on track to meet full Yr guidance, it has dropped $5 in the last 2 weeks for no APPARENT reason!!
I tried to pick stocks on fundamentals like P.E ratios, EPS, LFL growth, meeting budgets ect but many times you fail, the s/market doesn't operate on evidence!!
IMHO the stockmarket operates on the following 1.Greed 2.Fear 3.Confidence
By the way I'm only an intermediate trader, and this is my view only and would like discussion to my above points.