BUILD YOUR TRADING WATCHLIST
Apr 26, 2022Among the 7000+ lists of stocks, how can a trader find the stocks to trade?
Every trader must have a number of stocks on their radar even prior to the market open. These are the lists of stocks that traders will monitor for trading opportunities. This list is called a watchlist. Finding stocks in play at pre-market and at real time is made possible with the use of scanners.
Since not all stocks are created equal. Every trader needs a scanner to be profitable. Scanners are able to eliminate the stocks that are not tradable for retail traders like us. Stocks that have low liquidity, have poor price action, dominated by HFT (high frequency computers) are not able to provide opportunities for a retail trader. Traders will end up getting chopped and left paying high commissions on this type of stocks.
Once the scanner lists the stocks that are active for the day with specific criteria based on the trader's personality, trading style and strategy. Traders can then look into any catalysts or news that's giving this stock the strength to move. This saves the trader a lot of time from sifting through bunch of stocks that are not tradable. Through this process, day traders are always in a stock that is currently in play and that is being actively traded by traders.
Just like the common trading adage: "You are only as good as the stocks that you trade". If you are stock in a trade that has no volatility, poor price action that are dominated by computers then no matter how skilled you are in trading or how solid your strategies are, you will not be able to make money out of these untradeable stocks.
An example of a popular filter in the scanner prior to the market openings are: stocks that had gapped up or down > or < 3%, has volume of at least 100,000, has a clean pre-market trading activity (chart and volume wise) with respected intraday levels. Below is the scanner that we use in our intraday trading that gives us the stocks in play five days a week.
Learn how to choose the stocks in play by signing up in our TPA course. Don't trade alone, trade with our community of traders
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