Hidden Benefits of a Large Watch List
Bring wide eyes to your watch lists!
I’ve written before about my homework and the process I go through nightly to locate trading setups, but there’s a hidden benefit to my process that I feel greatly adds to my trading results.
Every afternoon after the market closes, I run my TeleChart scans and I end up with a ton of stocks in one big watch list. This big list is where I locate my trading candidates. Although I’ve seen software that offers to locate chart patterns and provide me with a potential shortcut, I feel strongly that a trained eye is better at picking up subtle nuances of a chart that may be extremely hard to mathematically define for a chart recognition software program. That is the primary reason why I flip through so many charts every night, but there is a huge added benefit I’ve noticed from taking the longer road – getting a feel for the overall market.
While I do take a close look at the market indexes every night in my newsletter (incidentally, every Sunday night you can get a look at my index charts on the free Market View page), there is an understated value in looking at a large watch list of individual stocks. Although it’s not too difficult to pick up on developing trends or trading ranges in the index charts, flipping through 2000 stocks manually tends to give me a much more complete view of how many stocks are setting up bullish patterns or if too many are getting extended. This in turn helps me to gauge how aggressive I should be the following day with adding new positions or paring back those which I am already in.
Flipping through such a long watch list takes me a little over an hour each afternoon, but I’ve found it’s time well spent for me. I started small with more like 50 stocks in my watch list, but as time has evolved, I’ve added more stocks to my tradable universe and my eyes have also become better trained to quickly locate the kinds of patterns I tend to trade. This has allowed me to look through many more charts in the same amount of time it used to require to examine those first 50. Making it a nightly habit will do the same for you!
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Jeff White
President, The Stock Bandit, Inc.
www.TheStockBandit.com
[tags]Stocks, Investing, Stock Trading, Trading, Stock Watch List, Chart Patterns[/tags]
