How to find the right stocks to trade
Although, I have shared my watchlist with you, we will go through the process of creating your own watchlist. Selecting the right stocks you trade is as important as learning our trading methodology. Stock selection is not about getting “secret stock tips” from some online forum. The process has to be diligent and meticulous.
Here is a quick summary of the criteria:
- STOCK PRICE
- Greater than $100
-
VOLUME
- Stock should have >= 1 million shares trade on a daily basis
- ATM options should >= 500 in volume
- OPEN INTEREST
- The open interest should be >= 1000
- BID/ASK SPREAD
- Tight bid-ask spreads are better. If The open interest and volume criteria are met, the bid/ask spread will automatically be tight and will fit our criteria
TOS Users:
- Here is the Scan Query:Â https://tos.mx/FhwcHqP
- Here is my personal TOS watchlist:Â https://tos.mx/YVJBkSj
- Here is my diversified S&P 500 watchlist:Â http://tos.mx/Q3AOr4b
It’s removed.
I assume you are still working on it.
Any way you could do a short one about some of these features in TW?
I will see what I can do. TW doesn’t have all the fancy features which TOS has. However, I will see if I can create a few watchlists and just share the outcome with you.
When I try to create in TOS a Study Filter the system tells me:
“Study Filters are based on pre-defined or custom scans.
You are not permissioned for Study Filters.”
So I guess I need to contact Support and get them to “permission me”.
Ok, the problem was I was in Paper Trading mode.
I switched to Live Trading and the system now allows me to add a Study Filter with average daily volume.
Glad you figured it out.
Thanks. Very interesting. Wow a lot of information.
Should we add share price > $100 ?
How do you determine if a stock has low or high volatility numerically?