Evaluate your technical stock pick
with a checklist
How to select best stock market symbols
Using an automatic stock screener to find the best technical stock pick is first step in stock-picking process. When I scan through the whole market for stocks that fit my preferred I receive a list of stock candidates.
Typically I receive between 100 - 300 stock symbols for each of broad scan I use (like for my
breakout or pullback
strategy).Then, I manually go through these lists. Using my special method
for selection of best stocks and ETFs
, I select the best stock picks and create my final short list of stocks for a swing trade setup or a position trade setup. Some time ago, I realized that it can be useful to write the criteria I use for creating the final short watchlist on paper.
Checklist is good stock market trading tool
I created a checklist of conditions that must be met for a good swing trading stock pick.Why do I use it ? Such a checklist ensures I won’t forget any important criterion during the evaluation of my scanner list. It also helps me to fix all the rules/criteria in my head.
Note: If you want to see my stock picks
based on stock scans I use personally,
I publish them in my
free stock and ETF trading newsletter.
How do I create such a checklist? I find a chart I like for a specific type of swing trade setup. I write all the criteria I see on this chart to the checklist. Look at this stock chart example of a typical breakout setup:
What do you see on this chart ? I see these points: - Price is above 20 EMA
- Price is above 50EMA
- Price is above 200SMA
- 20EMA is above 50EMA is above 200SMA
- Easy readable
horizontal resistance
level
-
Cup with handle
chart pattern on chart
- It’s possible to draw
uptrendline
OK. That's all. Now you have checklist with characteristics of a good breakout swing trade setup. Every time you watch some stock chart, compare it to the checklist points. If you find all the points on the chart, you can consider it a good
breakout swing trade setup.
And you can continue with planning
entry
,
target
and
stop-loss
levels for such technical stock pick setups. You can create similar checklists for each type of setup you’re using for trading.
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