How to systematically find sideways stocks?
You can likely use bollinger band values to programmatically recognize sideways trending stocks. Bollinger band averages expand during periods of volatility and then converge on the matched prices the longer there is little volatility in the asset prices. Also, look at the bollinger band formula to see if you can glean how that indicator does it, so that you can create something more custom fit to your idea.
In less than two decades, more than half of all publicly traded companies have disappeared. There were 7,355 U.S. stocks in November 1997, according to the Center for Research in Security Prices at the University of Chicago’s Booth School of Business. Nowadays, there are fewer than 3,600.  A close look at the data helps explain why stock pickers have been underperforming. And the shrinking number of companies should make all investors more skeptical about the market-beating claims of recently trendy strategies.  Back in November 1997, there were more than 2,500 small stocks and nearly 4,000 tiny “microcap” stocks, according to CRSP. At the end of 2016, fewer than 1,200 small and just under 1,900 microcap stocks were left.  Most of those companies melted away between 2000 and 2012, but the numbers so far show no signs of recovering.  Several factors explain the shrinking number of stocks, analysts say, including the regulatory red tape that discourages smaller companies from going and staying public; the flood of venture-capital funding that enables young companies to stay private longer; and the rise of private-equity funds, whose buyouts take shares off the public market.  For stock pickers, differentiating among the remaining choices is “an even harder game” than it was when the market consisted of twice as many companies, says Michael Mauboussin, an investment strategist at Credit Suisse in New York who wrote a report this spring titled “The Incredible Shrinking Universe of Stocks.”  That’s because the surviving companies tend to be “fewer, bigger, older, more profitable and easier to analyze,” he says — making stock picking much more competitive.  Consider small-stock funds. Often, they compare themselves to the Russell 2000, an index of the U.S. stocks ranked 1,001 through 3,000 by total market value. “Twenty years ago, there were over 4,000 stocks smaller” than the inclusion cutoff for the Russell 2000, says Lubos Pastor, a finance professor at the University of Chicago. “That number is down to less than 1,000 today.”  So fund managers have far fewer stocks to choose from if they venture outside the index — the very area where the best bargains might be found. More money chasing fewer stocks could lead some fund managers to buy indiscriminately, regardless of value.  Eric Cinnamond is a veteran portfolio manager with a solid record of investing in small stocks. Last year, he took the drastic step of shutting down his roughly $400 million mutual fund, Aston/River Road Independent Value, and giving his investors their money back.  “Prices got so crazy in small caps, I fired myself,” he says. “My portfolio was 90% in cash at the end, because I couldn’t find anything to buy. If I’d kept investing, I was sure I’d lose people their money.”  He adds, “It was the hardest thing I’ve ever done professionally, but I didn’t feel I had a choice. I knew my companies were overvalued.”  Mr. Cinnamond hopes to return to the market when, in his view, values become attractive again. He doesn’t expect recent conditions to be permanent.  The evaporation of thousands of companies may have one enduring result, however — and it could catch many investors by surprise.  Most research on historical returns, points out Mr. Mauboussin, is based on the days when the stock market had twice as many companies as it does today. “Was the population of companies so different then,” he asks, “that the inferences we draw from it might no longer be valid?”  So-called factor investing, also known as systematic or smart-beta investing, picks hundreds or thousands of stocks at a time based on common sources of risk and return. Among them: how big companies are, how much their shares fluctuate, how expensive their shares are relative to asset value and so on.  But the historical outperformance of many such factors may have been driven largely by the tiniest companies — exactly those that have disappeared from the market in droves.  Before concluding that small stocks or cheap “value” stocks will outrace the market as impressively as they did in the past, you should pause to consider how they will perform without the tailwinds from thousands of tiny stocks that no longer exist.  The stock market has more than tripled in the past eight years, so the eclipse of so many companies hasn’t been a catastrophe. But it does imply that investing in some of the market’s trendiest strategies might be less profitable in the future than they looked in the past. "&gt;Well put and, honestly, seemingly unavoidable.  Yes, there is an aspect of it that I think is the equivalent to ""ocean tides"" -- there are ""winds and waves"" of fortune (which are often mistaken as entirely due to ""merit"", when in fact the ""merit"" may have been only a minor factor).  &gt;As I see it, RE is a crap investment for the foreseeable future as oversupply and oversize are not absorbed. People have to live, so rentals will be key; but, they have already bloomed quite a bit.   I'd agree.  I've looked into (and decided to ""pass"") on the whole ""buy up a bunch of homes &amp; rent them out"" line.  There was definitely an ""opportunity"" with REO/foreclosure/distressed sale properties in the area, but after conferring and seeking advice from several *experienced* landlords, I have concluded that it is NOT the ""risk free/passive income"" mechanism that a lot of neophytes think it is; and there is substantial risk/effort involved, both in the form of capital investment (repairs, maintenance -- requiring both time &amp; money) as well as the unpredictability/probability of an interrupted revenue steam (bad renters are deuced difficult/expensive to deal with) as well as other costs (significantly increased property taxes, especially on rentals, etc.)  The truly ""big"" gains (to my understanding anyway) of being a landlord are the windfall ""cash out"" phase (where, having had renters paying the mortgage/interest, you get the benefit of the capital gain on the sale of the property) -- but due to what I *think* (and sincerely believe based on the dempgraphics of Boomer die-off), I am fairly certain that said ""payoff"" will not be anywhere NEAR as large in the coming decades as it has been in the past (if the payoff even exists at all, and isn't a net ""loss"", especially in light of the work/effort/investment involved).  &gt;Stocks will likely trade sideways for awhile before likely tanking as the forced/willing withdrawals start happening from the Boomers. So, keeping it in stocks doesn't sound overly positive, unless a fairly aggressive put strategy is enforced.   Depends on what you mean by ""stocks"". The overall market is one thing, specific stocks can be quite a different story. (While it is an extreme example, note the [dramatic difference between AAPL vs the Dow during the past decade](http://www.google.com/finance?chdnp=1&amp;chdd=1&amp;chds=1&amp;chdv=1&amp;chvs=maximized&amp;chdeh=0&amp;chfdeh=0&amp;chdet=1340654400000&amp;chddm=493051&amp;chls=IntervalBasedLine&amp;cmpto=INDEXDJX:.DJI&amp;cmptdms=0&amp;q=NASDAQ:AAPL&amp;ntsp=0) etc.)  Basically, the whole idea of passive/mindless (""set it and forget it"") gains from investments being the path to ""wealth"" has to go bye-bye -- it was never really ""real"" to begin with (unless you ""timed"" the market just right), and the vast majority of the gains were nominal anyway.  &gt;For me personally and selfishly, I have 20 years minimum for retirement, so I'm fine qith the market trending sideways or down. It means that I'm getting more bang for my DCA buck and, 20+ years from now, I will be well positioned when the market eventually cycles back up.   I guess I take the long-term historical view that the very concept of some ""guaranteed retirement"" was simply an aberration -- a lucky generation or two got away with it (sheerly by accident in the timing of their birth, something they really had no input into).  Instead I think one will ALWAYS need to be ""working"" in some manner or another -- actively overseeing ones investments and remaining ""agile"" in response.  And of course there is risk involved in that (as if there is really any reason we should expect there NOT to be? Anyone who thinks that way IMO is simply ignorant of the vast scope of human history).  The best I think one can do is to TRULY diversify (and that does NOT mean ""mutual funds"") -- to separate your eggs into various ""baskets"", holding some major part in solid (as solid as can be) form (even with the possibility of zero return and/or some ""loss"" -- i.e. owning primary housing clear of debt, some PM's in physical form, etc); having other assets in what are fairly solid ""bets"" (based on demographic trends, company quality, etc); and then some things (several small bets) that are ""long shots"" but potentially high-return things (where just one ""win"" can not only offset a dozen non-performers/losers, but gain you a substantial *real* profit).  Basically I think one has to use their mind and available information (which must be actively sought out and seriously analyzed/considered), and then even with all of that realize that there is a certain ""crap shoot"" aspect to everything, and that ""big winners"" are just as often either scam artists (who often get their comeuppance -- think Skilling/Enron); or who are just lucky shits who were in the right place, at the right time, were dealt the right cards AND subsequently made the right bets (due to [survivor](http://en.wikipedia.org/wiki/Survivorship_bias) and other biases we just don't often hear about the ones who hit 4 out of 5 of those things and who might have still been ""winners"" but just not large/prominent enough to gain fame &amp; recognition, much less the 3 out of 5 whose gains were minimal or a wash)." "Don't do it until you have educated yourself enough to know what you are doing. I hope you won't take this personally, but given that you are wandering around asking random strangers on the Internet how to ""get into investing,"" I feel safe in concluding that you are by no means a sophisticated enough investor to be choosing individual investments, nor should you be trusting financial advisors to choose investments for you. Believe me, they do not have your interests at heart. I usually advise people in your position to start by reading one book: A Random Walk Down Wall Street by Burton Malkiel. Once you've read the book by Malkiel you'll understand that the best strategy for all but the most sophisticated investors is to buy an index fund, which simply purchases a portfolio of ALL available stocks without trying to pick winners and losers. The best index funds are at Vanguard (there is also a Vanguard site for non-US residents). Vanguard is one of the very, very, very few honest players in the business. Unlike almost any other mutual fund, Vanguard is owned by its investors, so it has no profit motive. They never try to pick individual stocks, so they don't have to pay fancy high-priced analysts to pick stocks. If you find it impossible to open a Vanguard account from wherever you're living, find a local brokerage account that will allow you to invest in the US stock market. Many Vanguard mutual funds are available as ETFs which means that you buy and sell them just like any other stock on the US market, which should be easy to do from any reasonably civilized place." What is your time horizon? Over long horizons, you absolutely want to minimise the expense ratio – a seemingly puny 2% fee p.a. can cost you a third of your savings over 35 years. Over short horizons, the cost of trading in and trading out might matter more. A mutual fund might be front-loaded, i.e. charge a fixed initial percentage when you first purchase it. ETFs, traded daily on an exchange just like a stock, don't have that. What you'll pay there is the broker commission, and the bid-ask spread (and possibly any premium/discount the ETF has vis-a-vis the underlying asset value).  Another thing to keep in mind is tracking error: how closely does the fond mirror the underlying index it attempts to track? More often than not it works against you. However, not sure there is a systematic difference between ETFs and funds there. Size and age of a fund can matter, indeed - I've had new and smallish ETFs that didn't take off close down, so I had to sell and re-allocate the money. Two more minor aspects: Synthetic ETFs and lending to short sellers. 1) Some ETFs are synthetic, that is, they don't buy all the underlying shares replicating the index, actually owning the shares. Instead, they put the money in the bank and enter a swap with a counter-party, typically an investment bank, that promises to pay them the equivalent return of holding that share portfolio. In this case, you have (implicit) credit exposure to that counter-party - if the index performs well, and they don't pay up, well, tough luck. The ETF was relying on that swap, never really held the shares comprising the index, and won't necessarily cough up the difference. 2) In a similar vein, some (non-synthetic) ETFs hold the shares, but then lend them out to short sellers, earning extra money. This will increase the profit of the ETF provider, and potentially decrease your expense ratio (if they pass some of the profit on, or charge lower fees). So, that's a good thing. In case of an operational screw up, or if the short seller can't fulfil their obligations to return the shares, there is a risk of a loss.  These two considerations are not really a factor in normal times (except in improving ETF expense ratios), but during the 2009 meltdown they were floated as things to consider. Mutual funds and ETFs re-invest or pay out dividends. For a given mutual fund, you might be able to choose, while ETFs typically are of one type or the other. Not sure how tax treatment differs there, though, sorry (not something I have to deal with in my jurisdiction).  As a rule of thumb though, as alex vieux says, for a popular index, ETFs will be cheaper over the long term. Very low cost mutual funds, such as Vanguard, might be competitive though. Hey, I suggest you check this place out: http://www.investopedia.com/university/  You can start from there and then read through the things you don't know about and move on from there. When using youtube, search for specific things rather than a general/broad search. For example here's a good youtube video relating to Candlestick Breakout Patterns: https://youtu.be/1fB3EF7XeXU "I recommend you take a look at this lecture (really, the whole series is enlightening), from Swenson. He identifies 3 sources of returns: diversification, timing and selection. He appears to discard timing and selection as impossible. A student kinda calls him out on this. Diversification reduces risk, not increase returns. It turns out they did time the market, by shorting .com's before the bubble, and real estate just before the downturn. In 1990, Yale started a ""Absolute Return"" unit and allocated like 15 percent to it, mostly by selling US equities, that specializes in these sorts of hedging moves. As for why you might employ managers for specific areas, consider that the expense ratio Wall Street charges you or me still represent a very nice salary when applied to the billions in Yale's portfolio. So they hire internally to reduce expenses, and I'm sure they're kept busy. They also need people to sell off assets to maintain ratios, and figuring out which ones to sell might take specialized knowledge. Finally, in some areas, you functionally cannot invest without management. For example, Yale has a substantial allocation in private equity, and by definition that doesn't trade on the open market. The other thing you should consider is that for all its diversification, Yale lost 25 percent of their portfolio in 2009. For a technique that's supposed to reduce volatility, they seem to have a large range of returns over the past five years." As an easy way to answer... look at an index, let's say the S&P 500.  Look at the price this last October, and predict where it will move in November... easy right?  It already happened, and you have the benefit of hindsight.  The move looks like such a consistent, obvious continuation of the previous up and down pattern.  It looks predictable, like you could have guessed that.  Now, look at today's price, and predict where it will go next month.  Not so easy now?  The problem is, every point you're at, all the time, looks like a possible inflection point or turning point.  If you're following an uptrend, you may think it'll continue, but you may also think that it zigged so far up already, that now it's ready for a zag down where you'll buy.  So you wait... and it keeps rising, and you kick yourself for missing out.  Next time, you see another uptrend and resolve to buy it regardless, thinking now it'll keep going, but it turns down the second you buy it, and keeps dropping.  You kick yourself again.  The market is amazing at doing this to you every time.  In real time, every wiggle in the price looks simultaneously like a trend that could continue, and like a trend that has moved far enough and is ready to reverse.  And more likely you'll guess the wrong one.   The ONLY way with some little hope of succeeding is to study study study, and find and learn trading rules with just over 50/50 chances (like buying when a moving average is touched within an uptrend as an example, and setting a stop loss at -1%, and a sell limit at +2% or something), and then never ever deviate from that strategy, because your only hope is in the consistency of statistics and odds over time.  You'll get many -1% losses, and hopefully enough 2% gains to compensate the losses, plus some profit.   OR, to make it easier, just buy in on a dip, and hold and hold and collect dividends, and be content to match the market without effort. Disclaimer - I am 51. Not sure how that happened, because I remember being in my late teens like it was yesterday.  I've learned that picking individual stocks is tough. Very tough. For every Apple, there are dozens that go sideways for years or go under.  You don't mention how much you have to invest, but I suggest (A) if you have any income at all, open a Roth IRA. You are probably in the zero or 10% bracket, and now is the time to do this. Then, invest in ETFs or Index Mutual Funds. If one can get S&P minus .05% over their investing life, they will beat most investors.