I'm coming to you with questions. I feel like I've been studying for months and still don't know a few basic things so I wanted to see what others had to say.
How do you select the stocks that you play? Do every single one of your plays come from a watchlist you've written out the night before? Do you never deviate from that watchlist?
I'm trying to perfect one strategy so I stick to going long on breakouts. I used to run a scan every night for stocks on the 1 year daily chart that looked close to breaking out of a channel or to new highs with increasing volume in the past days. However I stopped doing that when most of the stocks on my watchlist never broke out. It seemed that honestly about 95%, if not more, of the stocks on my watchlist every night would either gap down or have a failed morning spike and double/triple top in the channel on the daily chart. Either way making a watchlist seemed pointless to me.
The way I find plays now is I have an intraday scanner going for biggest % gainers with increased volume and low float. I see these stocks, take a quick glance at a 1 year chart to see points of resistance/support, and then look for chart patterns (ascending triangles, bull flags, etc) to enter trades.
I think that this strategy is better because all of the huge % gainers we've had recently, 50, 100, 200% gainers, none of those come from anyone's watchlist. What I see on people's watchlists is stocks that don't move very much the next day.
This way they're always "new" plays
The only time I'm interested in a watchlist is stocks that have ran huge, then they have a big red day the next day, and then the day after that is usually followed by a pretty sizeable bounce. I like to go long on those. Other than that all of my trades are more "impulsive". I know everyone says that you should have a plan, but even tho these seem impulsive I don't believe they are. I due a bit of due diligence looking for support and resistance on the daily chart before entering a trade with them.
So what do you guys think, what is your most effective strategy? Do you enter trades with tickers you didn't know about or do all of your trades come from watchlists?