Six free key steps before buying a stock.

To make money trading stocks, you need to trade like you would run a business. A business has a plan, a process and a system. How a new trader approaches trading and the markets will determine his success from the start. Discipline is fundamental to a trader’s success.

Some of the key things to know about stocks before making a decision:

1. Which companies are reporting earnings and earnings this week?

2. What are the market expectations for the company’s revenues and profits?

3. What is the company’s current balance sheet and revenue structure?

4. What are the expectations and what is the company’s business plan for the current and next year?

Only after answering these four questions can we proceed to the fifth step: – building a thesis, a trading plan. Forming an independent, unbiased and objective opinion on whether we should buy a particular stock or not is the main difference between a professional trader and a beginner. After building a thesis, it is important to compare it with the opinion of the market, not to adapt it to it, but to look for the opposite points of view, trying to implement them to our strategy. There are always two sides to a coin and professionals know this, always looking at their positions from all angles. This is a way to improve and upgrade our trading strategy.

Here are some time-saving tools to use before making a purchase decision:

• The FINVIZ.com site – which companies are reporting this week? From the Screener menu, select Earnings Date – this/next week.

• Yahoo Finance’s free site provides guidance What are the expectations for Wall Street reports? – in the search engine we select the ticker of the company, and in the Analyzes menu we can see the estimated revenues and profits of the company.

• How do I find the revenue? Search the web for company name + “investor relations” Companies like Tesla /TSLA/ provide presentations, webcasts, earnings announcements, and more.

• How can I research the company’s expectations?

The Motley Fool’s free site has access to many conference calls. We enter the relevant company ticker, then go to Earnings Transcripts in the left sidebar.

Checking the already built, our thesis

You can use the premium articles and discussions on The Motley Fool’s Stock Advisor board Ticker→Premium Analysis as well as Ticker→Community→Discussion Panel.

Discipline in following the consistency of these simple rules would protect you from many wrong decisions in trading. Hobbies cost money, business makes money!