What's a better trading strategy? Learn and focus on a few stocks like what Don Bright advocates or trade many stocks using filters and sorters. Both sides have viable points. If you focus on a few stocks, you learn the in's and out's. You get the feel for the stocks and you'll capture good moves when they come, but on days when your stocks do nothing you'll make nothing. If you focus on a large basket of stocks you'll have many trading opportunities even on dull days, but you'll lose focus and miss out on major moves.
=== Prefer focusing on a few ; may look thru many & focus on a few stocks, occasional few derivatives. === Every purpose is established by counsel.- Solomon, trader king
Focussing on few stocks may give you a lot of slow churning days. Sometimes those few stocks do nothing for days and it becomes basically you vs a few traders and the specialist/MM. Thats a losing game. Don't get me wrong, I have more than a few favorites, but I learned the hard way that relying on them can hurt you very badly.
My advice is pick 2 or 3 sectors. Find your favorite two in those sectors and trade those. Some days one sector will be dead and the other moves and vice versa. I prefer sectors where the stocks are highly correlated with stocks within that sector and the futures as well. For example, the brokers and homebuilders. When one stock takes off the others will follow. Hope that helps. Just one approach....
I am swing trading stocks that are accelerating and are much stronger (or weaker) than the market. Only 5% of the time are stocks in this phase and I think this is the time when trading is safest because a lot of active traders are pushing the stock around and the price patterns and volume swells are more articulated. So I am scanning a universe of 500 perhaps more liquid stocks for initial breakouts with volume swells on the intraday 60, 120 and 180 min charts. I would never want to be intimately knowing any trading vehicle because( at least in my case) it usually leads to complacency. This way I apply my check list and it is either a go or not or the setup may stay on the checklist. I have little memory for what I traded even a week ago because I am not looking back, I am looking forward. I think what is the most wonderful about the stock market is that it is a universe and there are always stocks that are forming the next setup. If I was a daytrader I would still prefer to trade stocks because I would want to sell the ones that are weaker and buy the ones that are stronger than the market, using the relative strength concept to advantage. I can see daytrading stocks off a 20 stock watchlist. I am not knocking trading the E's it is just that trading the indices one gains and one also gives up some advantages.
Focus on a few stocks that you find are good to trade on a regular basis. These favorites should provide you with a trade 3 or 4 days a week. But still learn as many other correlations as you can. These will provide you with a trade maybe a few times a year. For example, i dont trade drugs stocks often, but i know that when mrk is killed like friday that i should short LLY because there is a good correlation. It seems to me that successful trading is all about knowing your correlations.
QUOTE]Quote from Lovelitera: I am swing trading stocks that are accelerating and are much stronger (or weaker) than the market. Only 5% of the time are stocks in this phase and I think this is the time when trading is safest because a lot of active traders are pushing the stock around and the price patterns and volume swells are more articulated. So I am scanning a universe of 500 perhaps more liquid stocks for initial breakouts with volume swells on the intraday 60, 120 and 180 min charts. [/QUOTE] What scanning program or website do you use? How do you scan for a breakout? I understand and know how to find them on chart but what criteria do you punch in on the scanner tho to make it find breakout's?
Last week I decided to watch the same 5 stocks every day. They are stocks I had traded before and I felt they were varied enough. Before I would scan and have many stocks to watch each day for different reasons and I felt like the wheels were coming off being spread so thin trying to capitalize on perceived opportunities. To soon to say if the same 5 is the right way, however I still scan for stocks and use option strategies with some which doesn't need as much attention and still satisfy may need to "do something". Have any others changed their routines?
trade futures and concentrate on 3 items only, while just having to keep an eye on whats going on with the rest of the market... YM / ES / NQ