The amount of stocks to pick is overwhelming, but so is choosing the right stock picking system to help you find the best picks of the thousands of available stocks.

But just like most stocks, most of them are not worth your time.

There are three fundamental mistakes that you will learn about in this article. Knowing this will help you avoid what is wrong about most stock picking systems and how to find the ones that work.

They are:

1) Picking a system that is too narrow.

2) Choosing a system that is too broad.

3) Picking a system that is too inflexible.

Mistake #1: Picking a System that is too narrow

Some systems will base their entire strategy on just technical indicators, multi-day candlestick patterns, or some form of divergence. The problem is that all of these systems are only using two factors: price and volume.

Would you buy a rental property based only based on its rent revenue? You also need to know the state of the property, the vacancy rate in your city, how much your utilities would be, to name some important details.

Stocks systems that are too narrow do not screen for overall market conditions, industry type, company specifics such as profitability, and much more. You need to take in the factors that matters as investing is more than finding a magical pattern that you hope will be like Midas’s touch. It takes expertise and common sense.

Mistake #2: Picking a System that is too broad

Choosing a stock system that is too broad would be the second mistake. To avoid giving the wrong advice, there are many stock professionals who will give tips and advice that is so vague, it is next to useless.

You need to learn the secret of riding the profits as long as possible while minimizing your losses and cutting them short. It takes a combination of realizing the various signals, but really understanding the precise signals to buy and sell. Is this approach right all the time? Of course not. Even Warren Buffet makes mistakes. You need consistency more that a single amazing return.

You need to find the expert opinion that is clear and precise, not too narrow or broad.

Mistake #3: Picking System that is too inflexible

There are lots of stock picking systems that are automated pieces of software. You will be told that you can leave these robo-traders running in the background to make you money. As absurd and appealing that may be, what happens when the market changes? Will your rigid piece of software change with it? Stock trading is not just a science; it is also an art that needs a human touch.

Your system should be ready to conform to your ideologies and values and not the other way around.

Flexibility is critical in any stock picking system. You might want to trade gold stocks, high tech, or commodities. Each industry requires a slightly different strategy. Do you like to buy and hold stocks? Do you like to short stocks? Most stock picking systems will be good for a particular philosophy.

The best system takes the best of the stock market and fits it to your goals, comfort levels, and style.

The Solution is to Ask the Right Questions

To pick stocks you need a system that avoids the three mistakes I listed. You need a stock picking system that provides control and precision. Only these will help you win the investment game.

I have published an excellent course called The Stock Options Course that teaches you the essential skills to invest into the equities market. The system addresses the three mistakes found in many other stock picking systems.