Stock Trading

How Do You Narrow Down Your Watchlist?

I don’t know about you, but one of the more difficult tasks for me a is narrowing down my watchlist to the few positions my system allows.

For instance, let’s say that I’m trading low priced breakouts, and there are 20 that meet my criteria on any given day — which stock do I choose?

Do I chose the stock that gained the most that day?  The stock that gained the least?  The one with the most volume?  The one highest above the 50 day MA?  The lowest price stock?

As you can see there are a multitude of deciding factors I can use.

Also, let’s face it, if I knew the exact set of criteria (if anyone did for that matter) to reduce my list down the exact single winner — I would own the market in about 1 month.

As that is not realistic, the best thing I can do is test and test and test and narrow my group down to the smallest number — and then take  a trade knowing that over time the stats will play themselves out.

One thing that is giving me food for thought is the power of the random trade experiment. 

If the random trade experiment can make money, then randomly choosing from an already narrowed field should also create a certain level of mental comfort at the time of selecting a single trade from a possible list of 10-20 charts.

Hmmmm, which one do I choose?

So how do you narrow your field of trades?

Any special parameters or criteria you use when your system suggests 10-20 trades on a given day?

Let me know in the comments section below.

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