The Right Stocks Beat More Stocks

I spend a lot of time around a lot of traders. I’ll be honest, this shocked me.

It’s two seemingly opposing views on watchlists. On one side, you’ve got the stock du jour crowd. On the other side, new traders. But the fix for both problems is the same.

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The Big Picture

Every day, most traders wake up, find the hottest stock, trade it, and close their laptop. Then, they forget the stock ever existed.

So, they start over with a brand-new watchlist each day. Which is exactly why they miss the best and most predictable move.

The problem is, if you’re not super fast like a ninja, the next thing you know you’re holding the bag.

Worse…

Day One Is a Knife Fight

When these speculative stocks go vertical, it’s chaos:

• Huge volume
• Wild swings
• Volatility halts…

Let’s unpack that last one.

It’s not that volatility halts don’t happen on multi-day runners. But because the price bands widen as the stock goes up, there tends to be fewer halts after day one.

Now, with multi-day runners, it’s different. The dust is settled. A lot of the day-one crowd got flushed. There’s nothing left in their account.

Guess what? Some of the most consistent patterns don’t play out in a day. They play out over days or sometimes weeks. But you’ll never see one if your watchlist resets every night.

You’ll also miss them if you never cull the list.

He Who Chases Many Rabbits Catches None

New traders like to think a big watchlist means they’re working hard. Or that more stocks is better. It isn’t.

What happens is they can’t track all of them. So, they end up missing everything.

It should be easy to kick stocks off your watchlist. They’re just speculative stocks. We don’t wait around much more than five days.

Now, we know they’ll probably run again in the future, but it might be months.

What people do is collect these watchless stocks. I think it’s because they’re bag holding, but it’s just hope.

If a stock doesn’t hold up, and doesn’t continue to trade with high volume, then it’s bye, bye.

Be ruthless getting stocks off your watchlist. They’re like unwelcome guests that have stayed three weeks after Christmas.

My Take

The more selective you are, the better. Fewer stocks means fewer things to monitor. So, instead of chasing all the rabbits and missing them, you’ll actually see the ones that matter.

Be brutal. If there’s no volume, cut it. If the catalyst is stale, cut it. If there’s no clear reason it’s still on your watchlist, cut it. A short list beats a long list every time.

At the same time, if you start over every day and don’t keep a rolling watchlist, you’re missing out on some of the best moves.

Bonus Tip: You don’t learn chart patterns from a book (especially the patterns we trade). You learn them by seeing the same shapes, same patterns, over and over.

Your rolling watchlist is a pattern recognition machine. It’s the simplest habit in all of trading and only takes about 10 minutes a night.

Watchlist

Planet Green Holdings Corp. (AMEX: PLAG) was yesterday’s big mover after the company announced it has entered the lactoferrin market and plans to hire a Chief Scientist. In other words, this is a scam China company with a fluff press release. Still, it’s a catalyst.

In keeping with today’s theme, you can see from the 1-year chart below that PLAG is a many-times former runner:

Yesterday (August 11), PLAG was halted multiple times as it ran +927%.

So, now that you know PLAG is a watch, add it to your rolling watchlist for today (Wednesday).

Then, watch it for the patterns you’ve studied from my eBook and over on the YouTube channel.

On My Radar

• Bullish on AI: Nvidia (NASDAQ: NVDA) lined up $500B in financing from big Wall Street firms
• More bullish on AI: Intel increased today’s stock offering to raise $20B
• I recommend this new free after-hours watchlist and trading guide form my mentor, Tim Sykes
• This is one way to get a spot in a gym class. Higgins would say “Shut up and lift”