How To Create A Day Trading Watchlist

How To Create A Day Trading Watchlist

How To Create A Day Trading Watchlist 1024 546 Steven Dux

The Intro.

So, you think you’re ready to dive into day trading, make trades, and hit the ground running…?

Hold on a second. I love the enthusiasm, but those who jump in too soon are those that struggle to succeed. If you’ve followed my Investing for Beginners series, done your research, practiced paper trades, and worked on your strategies, you might feel ready to get started. And in a way, you’re right… you are ready. 

Yet there’s something important to consider, and that is that you need to select the “right” stocks.

Right stocks

So… how do you go about looking for the right stocks to trade?

This is one of the most common questions I get asked. At least once a day a prospective student asks me… Dux, how do you find the stocks to trade? Choosing the right kind of stocks is one of the most important steps in Day Trading. You can do as much research as you want and follow the best advice, use the best strategies, and even have access to proven patterns, but if your stock selection is off, profits are hard to come by. The thing is, you cannot possibly monitor all of the stocks all of the time with the objective of picking from them. There are just far too many. If you think you can do this manually, there’s no chance.

Best ones

So how do active and successful traders keep an eye on the right stocks to pick the best one?

That’s where Day Trading Watchlists come in… Watchlists are a useful way for traders to put, into categories or lists, their preferred stocks in one place (instead of having to monitor everything at once). So, basically, a watchlist is a compilation of stocks that you’re paying attention to. In this article, we’ll go over one of the most important steps you should take as a day trader—every single day. That is, creating watchlists!! Creating watchlists not only helps you select the best stocks but also helps you keep up with the market. 

Even on the days you don’t trade, watchlists are important. Let us have a deeper look at what watchlists are and how you can create them.

What is

a day-trading watchlist?

Success in trading only comes to those with focus and concrete plans. The difference between a successful trader and a mediocre one comes down to how prepared they are. Over 94% of new traders fail during their first year because they are not properly prepared. And in order to be prepared, you need a watchlist.  

A watchlist

…is a set of stocks that a trader can monitor for potential opportunities.

At any given point in time, not all stocks hold potential. There’s just no point monitoring all of the stocks that exist. What is an effective practice, however, is monitoring a subset of stocks. That is what a watchlist is. As the name suggests, it’s a list of stocks you watch/monitor. These are stocks a trader is willing to buy and own at the right price, and so they monitor them to see when they reach the right price. These watchlists can be hand-curated and some are automated. As an example, Yahoo! Finance lists many curated watchlists with criteria such as “Most Active Penny Stocks” and “Most Shorted Stocks”.  

If you’re wondering what the benefits of watchlists are, here are a few amongst numerous:
Easier stock selection

Selection of the right stocks is one of the major steps in day trading and if every day we have to do it from all the stocks available in the market, that’s really not practical. Selecting from a watchlist instead makes this process easier.

Saves time

A great watchlist is one that saves you time, otherwise, you’d waste too much time scanning stocks.

Helps identify opportunity

There are thousands of stocks out there with hundreds of opportunities, but the average beginner misses out on spotting most of them. Why? Because they don’t have effective watchlists.

Keeps you focused

A good watchlist keeps you focused on stocks that matter and makes your trading process more effective.

The present economic situation around the world makes it even more important to be careful about which stocks you choose.

You should be building watchlists every single day. Creating a watchlist should be an essential aspect of your daily routine. The market is dynamic and doesn’t remain the same from one day to another. So how can our pool of stocks remain the same? Our stock watchlist should reflect what is going on in the market, and that requires freshening up the list every day. As a successful trader, there are certain daily habits you must build to become an excellent one. Building watchlists daily should be one of them! In fact, most new and experienced traders tend to forget that your daily habits can make or break your trading career.

Why Build

A Day Trading Watchlist?

There are quite a few reasons why building a day trading watchlist is a good idea. I wouldn’t say it’s mandatory but it is good practice. And good practices are what separate the great traders from the mediocre. Here are some reasons why building a day trading watchlist is a good idea: 

1.

Make Daily Stock Selection Easier

As day traders, we must select stocks to play with every day.

It’s impractical to select these stocks from the huge set that are in the market daily. We have to narrow it down. As a trader, you have limited resources. That includes your time. Time is one of your most precious resources that you must preserve and prioritize. This is where watchlists come in handy. With a watchlist, you’re able to keep trading simpler than tracking literally everything. This saves time and energy.  

2.

Identifying the opportunities

It’s all about identifying the right opportunities at the right time.

This does not happen by fluke. With watchlists, traders are able to easily spot trading opportunities. By narrowing the market down to a list of key stocks of interest, traders can divert all their attention to closely monitor the stocks that they are interested in to spot relevant opportunities. 

3.

Focusing on what's relevant

The stock market can be an overwhelming, focus on what’s relevant.

Having watchlists makes your daily trading more focused. Now you know which stocks to focus on, instead of shooting in the dark. You can focus on a particular industry, or related industries, or types of stocks et al. You can focus in terms of float, market cap, and so on. All traders must build a watchlist to focus on what’s relevant to them, letting go of as much noise as possible. 

My Biggest Tips

To Building Your Own Day Trading Watchlist

Building your own watchlist, especially as a beginner, is important and in fact something that should be done daily. Here are some tips I have to help you build your own trading watchlist: 

1.

Use the right tools & platforms

There are tools and platforms out there that help you create watchlists, sure. But the fact is, many of them don’t work properly.

The creation of the most optimized watchlists needs the right tools. This is why this year I launched a platform I’ve been working on with a handful of other traders, after seeing the downfalls of the existing retail platforms. Great for both beginner and advanced traders, StockCraft is one platform you can use to help you create efficient watchlists (amongst many of its other benefits). On StockCraft, you can create any number of watchlists to help you implement multiple strategies at once.

In addition, speed is of the utmost importance in trading, and we, as traders ourselves, made sure StockCraft is as efficient as possible to make sure you come across the most relevant information about your watchlist stocks faster than anyone else. StockCraft provides a 24/7 scanner that checks for stocks supposed to make big moves. This process is fast and happens in real-time. This is what you need to save time as the creation of lists has to be done daily. It cannot take a major chunk of your day. Time is of utmost importance here.

Not only that, StockCraft helps you make the best decision by showing you what all ranges the stock would go to. Not having the right watchlists means you’re losing out on precious time wasting it on stocks that you should not be focusing on. Stop wasting that time and start making profits. Now is the time to join. All you have to do is follow this link and choose the plan best suited for you and your trades. We’ll then send you some training material that shows you how to use some of our key features (including watchlist creation) so you can get the most value out of StockCraft straight away.

2.

Keep your watchlist fresh

One watchlist is not going to cut it.

Have at least three stock watchlists. Managing these lists manually is not something I would recommend. Especially when the right tools are available now. That’s why I partnered with my friend and fellow trader (Matti Owens) to create StockCraft

  • Primary list: Let this be your main watchlist. Keep it between 5-10 stocks. These are stocks you are willing to buy provided the right price conditions.
  • Secondary list: Keep this as your largest list, the range being 50-100 stocks. These are interesting stocks that you’re tempted to buy, but they do not yet meet your criteria. 
  • Favorites: A list that you aren’t monitoring daily but is nice to have. These will mostly be the favorite stocks of the market. 

3.

Keep your watchlist limited

Pay attention to the number of stocks in your watchlist.

If the number of stocks in your watchlist gets out of hand, there’s no point in creating one. Limit your list to the number you’re comfortable monitoring. If the watchlist becomes too long— longer than what you can manage, then it will become overwhelming. The watchlist then loses its purpose. Trimming your list on a regular basis can prevent that overwhelmed feeling. 

4.

Keep your watchlist fresh

The market is dynamic.

We know that the stock market constantly changes, so you have to constantly refresh your list to keep up. Your primary watchlist should only have stocks that you are actually interested in. So, make sure you refresh it daily. Whether you choose to do this manually or use a tool is up to you. Fix your investing criteria and add/remove stocks accordingly. Do this regularly. Finalize a time daily when you will do this. Cultivate it as a habit so you will never forget to do this. That’s why I partnered with my friend and fellow trader (Matti Owens) to create StockCraft. 

StockCraft makes it easier for you to create and manage lists, amongst many other features that make life easier for a trader.

How to build

A Day Trading Watchlist In StockCraft

Now that we know that the best and efficient way to create watchlists is with StockCraft, let us see how. Watch this video here to see each and every single step of how to create a watchlist, with this walkthrough tutorial.

Upon access

of the StockCraft platform.

When you have access to the platform you will get detailed tutorials and figure out the functionalities, but let me give you an overview. Once you are logged into StockCraft, you will have access to a few different indicators. When you are logged in, you will see something at the top of the page that will indicate the different things you can use to build the various tools within StockCraft. The most important indicator that you will want to use for this is called the Market Overview. This is the tool that will allow you to start building out your watchlists and see all the details of what trades you can make within the platform.   

StockCraft has two functions within the Market Overview section.

One side is, of course, watchlists, which I will just get to. The second is the side with the results of the scanner. What we’re focusing on today is the section with the watchlists. In the section of the Market Overview that has the watchlist functionality, you can: Create new watchlists, Save your created watchlists, and Upload existing watchlists. 

To start building a watchlist, you need to click the file button under the market overview tab. That will allow you to start building a new watchlist. If you have a watchlist you want to preload, you would click the open folder button to load an existing one. 

Watchlists

Once you have your watchlist up, all you need to do is locate which stock ticker you want to keep an eye out on.

Then, type them in the search bar. For me personally, I build my watchlists by looking at the top gainers the night before. You can extract this information from the stock trading platform you use, then pull these indicators into your watchlist by dropping their tickers into here. For example, to track Apple’s stock, you would type APPL into the stock indicator system, and it will bring up a graph for said stock. You can add as many stocks as you would like into this watchlist, so you can keep track of as many stocks as you would like. A lot of people like to keep track of 10-20 stocks in their watchlists.

For me, I find that could be too many stocks to pay attention to, as you can get overwhelmed with the data points from multiple stocks and if you try to find trades on each stock that you see, you could be at risk of overtrading. Personally, I believe that the less data you pay attention to, the more effective your trades will be. Each trading mentor has different recommendations on how many stocks to pay attention to, so make sure that the advice you are receiving is from someone who has actually traded extremely successfully and has a track record of success for themselves.  

Tickers

Once you have all the tickers saved in your watchlist, you can save your watchlist by clicking on the save icon.

Then, you will have a historic record of that watchlist that you can load up any time you are using StockCraft. You can choose which indicators you want to pay attention to within StockCraft as well. Some of the most important indicators that people often look out for are price and change percentage. You can also pull up multiple metrics and multiple charts to pay attention to at the same time, so you have a robust outlook of everything you need to know for what is going on in the stock market. 

Keep in mind that you will need to be mindful of your computer’s resources, as your computer may not be able to keep as many graphs as you like up on the screen.

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