I am a beginning trader. In investigating "systems" and trying to come up with a method of my own, its clear that the obvious first step is limiting the stocks to be considered. e.g., some might only look at S&P 500 or the Jack Hershey people limit there search to EPS rank and RS rank in the top 80% with limitations on float. So the question is, If one is going to apply some system to a set of good stocks. How can that set of good stocks be determined. As a further constraint, the set should be able to be determined by scanning software of some sort that is available at no or low cost. Just to emphasize, I am talking about determining an initial group of stocks (in my case, to trade long) that would be culled by further rules which are unspecified for purposes of this discussion. All comments appreciated.
Good Stocks.... definition: a. Those that go up when you're long 'em, b. Those that go down when you're short 'em.
You suck. (jk) Welcome to Elite Trader plebo. The first step is developing a system that works best for you and your personality. What are your risk guidelines? What would be your ideal Risk:Reward ratio? What type of timeframe do you think would best suit you? These are all much more important "first step tasks" than starting out by eliminating stocks when you aren't sure exactly how you want to trade them. With only vague guidelines of what you are wanting to trade, I would say your best bet is to use basic stock screening tools starting out. Long only is typically a bad idea, but you'll probably figure that one out on your own later. As far as what specific things you should screen for, I'd say it all depends on what you want to trade, what you don't want to trade, and what your reasoning behind opening a position would be based on. TA? News? Fundamentals? etc. Screen the things that make the most sense, filter out noise, and keep it simple at first. Experiment and see what works best for you. Add things, remove things, and see what happens. Good luck. Wait a minute... Dec 2004?!? What the hell have you been waiting for?