Evaluate your technical stock pickwith checklistUsing automatic scanner to find best technical stock pick is first step in stock picking process. When I do scanning through whole market for stocks which fit with my preferred criteria I receive list of stock candidates. Typically I receive between 100 - 300 stock symbols for each of broader scanner I use (like for my breakout or pullback strategy). Then I manually go through these lists. Using my knowledge of stock chart analysis , I am selecting best stock picks and create my final short list of stocks for swing trade setup or position trade setup. Some time ago I realized that it can be useful to write to paper my criteria I use for creation final short watch list . I created check list of conditions which must be met for good swing trading stock pick. Why I use it ? Such check list make me sure that I will not forget one important criterion during evaluation of my scanner list. It also helps me to fix all rules/criteria into my head . based on stock scans I use personally, I publish them in my free stock and ETF trading newsletter. How I create such check list ? I find a chart I like for specific type of swing trade setup. I write all criteria I see on this chart to checklist. Look at this stock chart example of typical breakout setup:
What do you see on this chart ? I see these points:
OK. That's all. Now you have checklist with characteristics of good breakout swing trade setup. Every time you will watch some stock chart, compare it to the checklist points. If you will find all points on chart, you can consider it as good breakout swing trade setup. And you can continue with planning entry , target and stop-loss levels for such setups. Similar checklists you can create for each type of setup you are using for trading.
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