Watching Too Many Stocks Does No Good
Does your chance of making winning trades increases by watching more stocks ?
After years of trading I have realized that watching too many stocks actually hurts your chances of making a good trade. This is because you cannot devote enough time or research to the stocks you plan to trade. By breaking the huge set into smaller selective ones, your odds of winning increases. This helps you keep track of resistance/support, volume & any related news about those selective stocks.
Having a smaller set also helps you plan your trade before the market opens. You can plan entry/exit points based on price action.
I know traders that scan/watch 30-50 stocks per day. Not sure how they do it, and how can they have a plan for each of them ?
I follow 10-12 stocks per day as my watchlist. By confining myself to a smaller set, I can give them my undivided attention. I can plan entry/exit/stop loss prior to market open. The stocks that do not make it to the watchlist, but still look attractive go to my alert manager. By setting alerts for them, I will look into them if certain price action occurs for those stocks.
This makes my trading less chaotic and predictable and provides the discipline every trader needs.
[...] WATCHING TOO MANY STOCKS DOES NO GOOD Posted by Stock Online Trader in Educational on 23-09-2009 [...]