How many times have you come into a trading day without preparing ahead of time?
I mean I can tell you a lot of traders do…
I’m going to be honest with you… I’ve done this too many times to count when I first started to trade. Of course, my account did take some hits because I wasn’t prepared.
I don’t want the same to happen to you, especially right now.
That said, my turning point was finding a strategy that works for me and learning to prepare in advance.
Since then I have never looked back.
Now, I make it a daily habit to be prepared. It’s a key reason why I stay on top—while other traders struggle.
A big part of that is creating a watchlist the night before, which gives me a huge advantage.
If you can’t commit to making this a daily habit, or just don’t want to… I actually provide my subscribers with video watchlists… so they know exactly what the plan is on any given day.
But listen, it’s not actually that hard to put together a watchlist yourself.
In fact, it’s so easy to do, I am going to show you how to create one, along with how to use it…
First the what… a stock watchlist is exactly what it sounds like. A list of stocks that you are watching. In this case you are watching the stocks for potential trade setups.
For that reason, you don’t want a list full of a bunch of random stocks. You want it full ofstocks that are ripe for trading.
And in my case that means stocks that could possibly present good trade setups the very next day.
And the Why…
There are simply too many stocks to keep track off, way too many. So what will you do in the morning if you are starting from scratch?
Most likely you’ll end up overwhelmed and anxious and pressured to find something to trade as quickly as possible creating some forced trades… and inevitably missing some great ones.
You always need to have a plan going into the day and having a watchlist is at the root of that plan.
It’s my way of getting a head start on the trading day.
How to Create a Watchlist
First, you always need a trading system/ strategy or you shouldn’t be trading at all. Let’s assume you do (if not click here).
When you have a strategy, you know what you are looking for to make a trade. So it’s easy to put together a watchlist. In fact, it only takes me a few minutes each night.
The biggest part of my watchlist will come from my criteria scan. Knowing the criteria for my trades, I am able to run a screener that pulls up matching stocks in a matter of seconds.
Some of the things I scan for:
- High percentage movers – this is a big one in penny stocks
- Higher than average volume – tells me there’s interest
- Breakouts – One of my favorite trades is the breakout, so I will be watching for stocks that just broke above consolidation, a previous high, or are trading close to those levels
- Chart patterns – I use a number of chart patterns in my trading setups. When creating a watchlist, it is good to keep an eye on stocks that have formed or are forming those patterns. (learn my patterns here).
For more insight on using scans, check out my post about scanning for trade setups.
After entering your criteria, the screener will come back with a list of stocks matching your inputs.
From there, you need to narrow it down to the stocks that are best set up for trading right now.
And that’s as easy as looking at charts… sounds time-consuming, but it’s not. With your scan completed, you just scroll through the list looking for your patterns.
Below is an example of my scan results. There are only 20 stocks on the scan and as you can see there are 9 charts on one screen and a scroll bar on the right.
So it really is as easy as just scrolling through the charts.
With that, I have the base for my watchlist.
But I don’t want to miss anything, so I check a few more places before finalizing my list.
- Stocks in play the day before – you just finished trading… that alone should produce at least one good candidate to watch tomorrow.
- Don’t be afraid to go back to another recent watchlist to look for new setups
- Stocks you trade well… or had recent good trades in is another good place to look
- News – this is a good one to potentially find catalysts for the next day… I don’t spend much time on this myself as I believe the charts will tell the story… for example- if a catalyst has legs, it will be a top percentage mover, show high volume and break out… all things I look for in my scan.
Now it’s time to make the list.
This is key… Don’t just write down the symbols. What happens in the heat of the moment when you pull up the stock and it’s moving, but all you have is a symbol on a piece of paper?
View the watchlist as your preliminary trade plan, and treat it accordingly.
Add important price levels, chart patterns, where a breakout would occur, where the next resistance is at, where support is etc…
What do you need to see in order to make a trade?
Having a watchlist is so critical that I make one every day and send it out to my members every evening.
And to make it even easier for them… I do this in video format so I can quickly walk them through the charts, and talk about the detailed plans for trading each stock, get access here.
As you can see in the above image, it’s only a few minutes long so it won’t take all night to get prepared for trading tomorrow. A few minutes each evening and you’re ready to go.
Putting It To Use
First off, keep it on your screen where you are always aware of the stocks. Depending on your broker, there are all sorts of boardviews and ticker boards etc.
Just enter all of the watchlist stocks into one window so you can see the price and changes all in one place. And with a mental note on price levels, you can pretty much know if it’s getting to an area of interest or not, just with a glance.
Second… Set Alerts!
Something as simple as an alert can save you from missing a massive trade while you place your next order for Grim Bean Coffee on the internet…
… and save everyone at your next happy hour from hearing the story of how you missed the perfect trade.
And guess what? They won’t believe you anyway… so just set the alert.
This should go without saying…but use your watchlist to make trades according to your plan.
You spent the time to find the right stocks to watch. You created a plan for each of those stocks.
Now show the patience to wait for the right setup. Only trade the stocks that actually set up according to your plan.
There will be days where none of them do and days where you have too many setups to take them all… but either way, with the watchlist we are always ready.
By using a watchlist, I am able tofind trades like this one in ENZC. After breaking resistance ENZC made a nice pop, doubling in the matter of a couple days…
Now I didn’t get that full gain myself. In fact, I’m not even trying to get every last cent from a trade.
It’s not about being greedy…it’s about taking high probability setups that give me a good chance of cashing in quickly on big moves.
And that’s what I was able to do with ENZC.
And having ENZCon my watchlist was key to getting into this trade.
First off, I have the stock in front of me knowing it could give me a trade, so my eye is on it.
And most importantly I have a plan for it. I know what levels I like and what I want to see. So when it happens, I’m ready.
By scanning for stocks matching my trade parameters and adding them to a watchlist for the next day, I am able to find trades like this… and stay consistently profitable even when the overall market isn’t.
In fact, my strategy has produced triple and quadruple digit returns in my multiple small account challenges over the past few years. Earlier this year I took a tiny $500 account and turned it into over $10,758…in just 58 trading days.*
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