Building my watchlists

Starting out I thought I’d need to create a brand-new list of tickers for every trading day because I was mainly looking into day trading at the time. Listening to the Chat with Traders podcast offered me a new idea. Quite a few traders there seemed to focus on just a few stocks. How many “a few” actually means differs from person to person. However, the idea appealed to me.

Finding stocks

Because I had to start somewhere, I identified tickers using three approaches:

  1. I listed known companies such as Apple and Microsoft; just anything that came to mind.
  2. I employed Finviz as a screener using various search criteria, e.g today’s movers with a low RSI. I played around a bit with different screener settings.
  3. If I came across a company in a financial newsletter, on social media or some other context, I’d check out its chart.

If I liked the look of the chart, I’d add the stock to my shortlist. I prefer neat charts, at the very least the daily chart should make sense to me at first glance. If there are too many long wicks, gaps or long candles, I’m not interested because it confuses me too much. Hence, it would be unlikely that I’d ever manage to identify good entry or exit points.

Sorting stocks

Then I decided to sort tickers into 3 lists:

  • ‘Regulars A’ includes stocks that generally promise bigger moves in a short timeframe, say at least $1/share within a few days, and are affordable. The idea is that I check these stocks first to prepare the trading week.
  • ‘Regulars B’ contains all other shortlisted stocks. I check these if there aren’t any suitable A stocks, or I have spare time.
  • Eventually, I added an ‘Invest’ group with stocks that are expensive and appear to be more the sort of stock you hold for a good while. Currently, I just stash tickers there for later, as I am not interested in investing just now.

I add and evaluate stocks as I go along. I have already re-shuffled and removed some after scrutinising the charts in more detail.

To keep track of interesting stocks during the week, I have added watchlists for more transient content to help me find the relevant charts easily, e.g. lists with potential stocks for long and short trades or active real and paper trades.

The free version of my charting software from Technician lets me have plenty of watchlists and one stock can be logged in several lists. The only thing that bugs me is that I cannot sort the lists alphabetically or even manually. They are displayed in order of creation. But that’s a minor issue.