When trading the Stock Markets, how you make your Stock Trading Picks can be the difference between success and failure. Of course, how you filter your trade picks, can also save you a lot of time. So it makes sense for your trading success and time management to build a process that helps achieve this.
With this in mind, I have decided to put together some tips to help traders save time and money while searching for Stock Trading Picks
Filter by Price & Volume
Depending on your trading style, you may want to focus your stock trading picks on blue chip stocks, avoiding penny stocks or stocks of low liquidity, or vice-versa. The quickest and easiest way to target the Stocks or Stock Options that fit your trading style, is to filter by a certain price bracket or liquidity/volume.
By conducting this search you can make a list, or a folder full of the stocks that fit your criteria, so you don’t waste time analyzing stocks that don’t.
Making Sense of Indicators
Most Technical Traders study one, or a group of Technical Indicators that either signal what price mode (Bullish, Neutral, or Bearish) the stocks price action is in, or Entry and Exit Signals.
It is easy, when looking at multiple indicators to be caught in two minds, trying the rationalize what the indicators are saying. Especially when one indicator is saying one thing, and other indicators are saying another.
With that in mind, the key to good trade picking practice from a western technical standpoint, is to use a primary indicator to give your main signals to Buy or Short. Then use a secondary indicator/s to filter out poor or bad signals, and thus helping you focus on the good signals, and avoid taking the poor.
For the above reason, one of my favourite primary indicators is Percent R indicator
Understanding Time Frames
Traders also need to consider what time-frame they are going to trade…
Standard time frames to trade are:
- Long Term Trader ==> Monthly Charts
- Intermediate Trader ==> Weekly Charts
- Position Trader ==> Daily Charts
- Swing Trader ==> 60 min Charts
- Day Trader ==> 1-15 min. Charts
Its recommend that traders starting out, only focus on one time frame, keying their entry and exits off a single time-frame, which suits their trading style.
It can be a dangerous game swapping time-frames, taking your stock trading signal off one time frame, and managing or exiting trade positions off another time frame. With this practice, it can be easy to whipsaw yourself out of a position, only to see it hold on the close of the Original Time-frame.
With that said, it can be really powerful to look at multiple time-frames while filtering your stock trading picks, as a way or filtering out the bad signals. If you can manage to find opportunities that have the two or three Time-Frames aligned and in agreeance, your chances of success will greatly increase.
So there you have it, 3 great ways to improve your stock scanning process for finding great Stock Trading Picks.
Whether you like to manually filkter your stocks, or automate the filtering process with stock scanning software, these tips can help save time and money. The only thing each trader must do, is decide on which methods and criteria they would like to filter stocks by, and a list of Trading Picks can then be produced in a matter of minutes.
Happy Trading,
Cade Arnel
Trend Hunter
www.globaltrendtraders.com 2009-2011 ©
Hi Cade,
That is great advice. Filtering your stock trading picks down to the stocks with a high probability of a good trading opportunity takes a lot of unnecessary pressure off your trading routine.
Focusing on stocks with a high probability does wonders for the levels of concentration and confidence also.
Cheers,
Dave
Hi Cade,
Sounds like setting your time frame watch is another rational approach to trading that helps keep the emotions at bay. Stock trading picks can feel a bit like Russian Roulette at times, but if you have a map with clear rules outlined, this helps keep your emotions in check while focusing your attention on the core areas and filtering out the noise.
Hi David,
Yes, in my experience using other time-frames as extra confirmation will increase your probability and confidence in a successful trade.
Defining your process and criteria of filtering stock trading picks in a Written Trading Plan, will alleviate the feeling of Russian Roulette, as it will provide a foundation for consistent execution/performance and continuous improvement.
You give some great advice on your website Cade and this post is not exception. I particularly like the Percent R indicator you mention.
Thanks Jan. Glad you liked it.
Yes the Percent R system is a great system, and is one I personally use myself.
Hello Cade,
I like the three indicators liquidity, technical and time frames. Use them all in differing degrees. The percent R indicator is new to me and warrants further investigation.
This is great advice Cade. Following a system inclusive of indicators, filters and timeframes helps all traders to stick to their rules rather than act off their emotions. As you’ve stated, it saves a lot of time too in deciding on those trading picks.
Caroline
Using multiple time frames is an excellent method for putting probability on your side. Whether using indicators or simply price action, lining up your trade with two strong trends creates powerful synergy.
Hi Cade
I like your take on the time frame of placing a trade. I suppose you have seen it all to often when a person is doing a day trade gets it wrong and it turns into a monthly as they pray that it will turn around, so instead of a small lose at the time, they face a trade wipe out.
You right on keeping your indicators to a minimum, as too many will confuse and keep you out of some great trades.
Will do some research on Percent R to see if it will help in my trading.
My opinion is no matter what indicators you trade with or what time frames. As a trader, you must have a written trading plan and then strictly follow the plan. And from time to time, keep improving your trading plan until it makes consistent profit.
Since I am a daily trader, I will pick the liquidity as my prime indicator to choose a stock. Also that, I try to choose the stock that volatile enough to trade in daily — at least in weekly.