Description

My basic trading philosophy can be summed up by one simple quote:

"Trade the ticker, not the company" - Nate Michaud


Thursday, February 6, 2014

Question: "How do you create your watchlists?"

My watchlists are actually pretty simple; not a whole lot goes into them. There are two things I use to build them - market scanners and my email address.

The email address is simple enough. All I have to do is check my email and see what stocks are being promoted by my favorite promoters (blog post on this coming soon). If the stock is trading good volume or has a chart pattern that I like, it is immediately added to my watchlist for the following day.

Market scans are slightly more complicated. I recommend one of two market scanners, either "Equityfeed" or the market scanner that comes with Interactive Brokers' trading platform. But what exactly do I scan for? Since I've made most of my money trading OTC stocks, the first thing I do is set my filter to only pick up OTC or Pink Sheet stocks.


There are a few criteria I look for when scanning the OTC market. I set my scanner to find stocks that are trading above $500,000 in volume, priced above $0.05, priced below $5, and up more than 5% on the day. This will pull up a list of stocks that meet this criteria for the day. Next, I look at the daily charts for the stocks that appear on this scan and look for chart patterns that I'm familiar with and like to trade. For example, I'll look for daily stock charts that are getting overextended, or perhaps close to a key breakout. If I like the chart, I add the stock to my watchlist. If I don't like the chart, I simply ignore it.

From there, it's simply a matter of prioritizing what I'm most likely to play the following day and which plays are more on radar than immediate plays. When the following day concludes, I decide which stocks to keep on my watchlist (based off of their charts), which to remove, and then I start the whole process over again.

Hope this clears up my preparation process! There really is no more to it than this. I don't dig through filings, I don't analyze news releases, I don't worry about what the message board trolls are saying. It's all about the chart and the pattern for me. If any of this isn't clear, feel free to leave a comment, I'll be happy to clear up any confusion!

59 comments:

  1. Nice post Tim. Keep up the great work!

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  2. What time of the day do you run your scans? Given that you are scanning stocks with $500,000 in volume and up more than 5%, I'm guessing you run the scan around 10:00am?

    Btw, I just want you to know that I really like your blog, and really appreciate your posts.

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    1. Ah yeah I should have clarified that, I'm actually scanning throughout the day and will add midday sometimes. Just wanted to keep the post simpler and approach it from an after hours perspective

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  3. Another excellent post. I really appreciate you sharing your knowledge.

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  4. I didn't want to clutter your inbox with questions, so I'll ask here.

    What chart do you use during trading? 1 day / 1 minute, 1 day / 5 minutes, etc? What is your exit point, i.e. at what percentage do you call it a bad trade and get out?

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    1. Hey Todd, inbox is okay that actually makes it a lot easier for me to track what to write about next! I'll make a note about your question and get to it soon!

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    2. looking forward to it, please post a public blog about it :)

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  5. Wow Tim, another excellent blog post! I've been checking your blog every day since you guys announced it in chat, and man, I'm impressed! Your posts are always very clear and helpful, and you're not afraid to give away advice that others would quite literally make us pay for.

    (I'm Jinzo in chat btw)

    Two thumbs way up man, Tim Sykes is lucky to have you on his team.

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  6. Thks for the reply tim in my inbox.
    great tip regarding scans...........thks once again
    andres

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  7. Have you tried Stockstotrade? i heard it is built on the equityfeed platform but have tim's preconfigured filter similar to what you are using and cost less per month beside the $2k upfront cost

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    1. I've actually never tried stockstotrade but I hear it is pretty similar to equityfeed. The $2k upfront cost sounds pretty absurd, especially if there is a monthly fee too. Good luck with whatever you wind up using!

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    2. ya like anything from Tim, you have to pay big bucks for extra knowledge unlike your blog which i am very grateful for, thank you !
      Though the upfront cost is high it run you cheaper long term pretty quickly at $120/month for all US equity while equity feed is $180/m, correct me if im wrong

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    3. Well if you do the math on that, after 33 months the "Stockstotrade" option will have made up the difference and become cheaper. Not sure if that's a short or long time, but do with that info what you will!

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  8. Where do you keep your watchlist? hand paper, Word Doc, Google Doc, etc ?

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    1. Yeah I just type out a little watchlist every night on a word doc. Eventually I may start posting it to this blog I still have to decide whether that's something I want to do or not

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    2. That would be very helpful. :)

      You have an interesting trading strategy that I'd like to learn.

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  9. another great post, Tim! Very clear, easy to understand! Thank you so much!

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  10. Got it....appreciate you sharing this...

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  11. Hey Tim,
    First thanks for the post. Secondly how much does news (i.e. press releases, talking head posts, analyst upgrades/downgrades etc.) focus into your day trading once you have established a watchlist? Or are you trading regardless if there is volatility, liquidity, and the right pattern?

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    1. News barely factors in, if a new stock pops on my radar the primary reason is that I like the chart. The reason for this could be any one of those reasons, but I don't tend to value one reason higher than another or anything like that. As long as I have volatility, liquidity, and a chart pattern I like, that's all that matters to me.

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    2. Can you explain scc filings and disclaimer and how it's effective fir choosing a stock

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    3. I don't care at all about SEC filings I don't waste my time digging through them. I'm just trading charts. Only time I look at disclaimers in emails is just to see if the promoter was compensated to send out the email or not, but big scheme of things even that isn't super important

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    4. So if the promoter is compensated, then that means he is involved in the pump and dump? For example, I received compensated emails from maximumpennystocks.com on WPWR, which is stocktips pick as well. Does this mean they are sister sites?

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    5. Not necessarily, you need to track them now. Do they promote the same stocks as stocktips.com? Or do they do some picks on their own? Are emails word for word the same? These are the things to keep an eye on

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  12. Thanks Tim! I really appreciate that you take the time to right these posts and answer all of our questions. Cheers!

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  13. Really enjoyed reading this post, thanks Tim !

    But to be completely clear, you're not doing any in depth analysis? Just going through charts one at a time? How do you prioritize them?

    I'd appreciate any response, thanks again.

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    1. You're right, no in depth analysis, I just play the charts!

      When I'm in the moment trading I'm paying closest attention to the intraday one-minute chart, but I definitely am also aware of where the daily chart is and what the "Big picture" looks like. That's what I form my overall bias from. I'll try to get a post up further clarifying this soon

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  14. Hi Tim, great blog - really appreciate your insights!
    I've been looking for a free alternative for stock screening and have recently started using Google Stock Screener for building my watchlists: https://www.google.ca/finance/stockscreener It lets you set a number of criteria e.g. quote % change, volume etc. It's not perfect and still in beta, but I find it usable and hopefully Google will continue to improve it.

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    1. Thanks for the suggestion, that may be a good free option for people to use! You're right, not quite as in depth as some of the paid options, but still usable!

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    2. Nice freebee by google! The only concern I have is for screens during intraday trading. Google does have a 15 min delay on OTC stocks, I would think this would affect the screener too. What are your thoughts Tim?

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    3. Well obviously if it was a time sensitive play, you'd miss it. But if you're just trying to find the stocks trading the most volume or something like that you'd likely find those just fine even with a delay

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  15. Hey Tim, Thanks for the wealth of knowledge on these pages. You have no idea how much this helps out us "newbies" as we start on our path...
    My question is on "Equityfeed", I was going to try the 30 day free trial. Do you only use the OTC or both the Nasdaq & OTC info?

    Thanks

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    1. I only get their OTC data, but that's because i mainly trade OTC stocks. You should choose whichever subscription will best fit your strategy and the stocks you trade

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  16. Tim, the way you broke down the whole process of your watch list and what you are looking for on each stock is great. I hope you decide to post more of your daily watch lists. Thanks for all of your work on this blog, it's amazing!

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  17. Hi Tim, just curious if you use the same criteria when looking into Pumps to buy - would you still only buy pumps that are 500,000+ in volume? Thanks!

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    1. Yep I still care about the stock having good volume, that's one of the most important criteria in my opinion. Good volume lowers the risk of getting caught in a panic I think

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  18. Hi Tim, do you also read the SEC Fillings from the stocks in your watchlist?

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    1. Not at all, that won't help me trade them

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  19. Hi Tim, I am new here and am from Hong Kong. About the 5% thing, do you care about the stock if these past weeks have been smooth (liked up 30%), or dump (liked 30%), as the 5% today can reflect if its a continuation of the 30% up, or just a small rebounce of the 30%?
    Or in fact, you go through all the stocks charts and justify yourself by patterns?

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    1. I go through the charts and justify by patterns. The main reason I have a 5% minimum is because I don't want to waste my time on stocks with hardly any volatility. The more it's up, the better

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  20. Hey Tim,

    Is there an average pattern seen with pump & dumps? Such as a slow build on the 3 month chart, larger build in 5 day charts and then the spike? When looking for pumps is it even worth watching the 3 month charts or should I just watch the 5 day and 1 day charts? Thanks

    PS. Great Blog!!!

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  21. Hi Tim,

    first of all, thank you for sharing your knowledge and valuable information for free!

    As you recently traded mostly listed securities i wonder if the scan methods you use to find them are the same as for OTC stocks, that is above $500,000 in volume, priced above $0.05, priced below $5, and up more than 5% on the day, or do you set any additional criteria for nasdaqs?

    Kind regards,
    Elchin

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  22. Hi Tim. I am a bit confused from the current hot biotech plays. I am talking about NDRM, BCLI, CNOT. They posted positive news, at least NDRM had positive results and BCLI was more of a rumour play because the spike anticipated the tests, but i notice that even though they all have good news people look to short them. Yes, the their financials are not great, but still as i have learnt from Tim's DVDs when news are positive ( not PR or fluff ) i should look to long them. Or maybe people i follow on twitter are short-oriented and feel more comfortable shorting the pullbacks that are caused by profit-taking, or what ?

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  23. Hi Tim, I heard you in an interview on IU and I thought you said you had gone to Marquette U. So does that mean you live somewhere in the greater Milwaukee area?
    If so or even further out, is there any chance I could chat with you face to face or even better spend a day as a fly on the wall near your trade screens? I am 70 + and still working my medical day job. 5 Kids all married and I really want to sharpen my game. Would appreciate it a whole lot. Let me know. email is wjn57@hotmail.com I do NOT use my gmail. Thanks Bill Hartford, WI

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  24. Hi Tim, Thanks for the great blog. How many trades per day do you do on average?

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  25. Tim,

    Thanks for being willing to help those of us willing to learn.

    Scott
    Columbus, OH

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  26. Hi Tim

    When you refer to trading volume of over $500,000, what time period are you referring to?

    Thanks
    Jason

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  27. Tim you are so helpful, Thanks!

    Rehards,

    M.Magro

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  28. Tim you are so helpful, Thanks!

    Rehards,

    M.Magro

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  29. Hey, by all means I do not mean any disrespect but I was wondering if you my do a one or two time super flash sell for about 30 min to an hour on trade the ticker dvd for 150 to 200 dollars. Thanks

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  30. As Always, Interesting! Thanks Tim!

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  31. Hey Tim Great article, I am just starting out trading and I feel this will be some outstanding information to help me learn. I also want to do Tim Sykes trading challenge but am saving and working on building my account.

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  32. Would you recommend to still use this scan in 2016?

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  33. What do you use to track the promoters? Are there any email promoters you still mainly use?

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  34. Hi Tim and thank you for the post.
    I know you like to short more than you like to buy but was wondering how you make the ultimate decision when to buy the stock and whether you stay long over night or not?

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  35. Hi Tim,

    You have made a move into larger stocks outside of the OTC realm. Would you mind a quick update for how you update your scans for that? Any help is appreciated.

    Thank you,

    Joe Kelley

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