Scanning - Managing your lists

So you figure out that you need to scan in order to generate ideas and you get really ambitious creating 5 or 6 scans that find setups that interest you. You run the scans and start building watch lists for those patterns that are interesting. You may make 2 or 3 trades based on your scans but for every trade you make, there's probably 10 or 20 still on the watch lists that you are observing. After a month of doing this your watch lists grow to a size that they basically become unusable. You have too much data now rather than too little! You still don't have a workable solution. You need to find a way to manage the lists. I know, I've been there and constantly am working to keep my lists fresh.

Just as there's no one scan that will give you that magical entry and only that entry, there's no magical way to manage your watch lists; at least not that I have found. The trade off is how much time you spend versus missing how many potential entries you miss because you were not on top of the situation.

Since I spend way to much time on trading already, I have tried to find a system that keeps my managing of lists to a reasonable amount. The way I've tried to do this is by managing my lists based on time frames. I've kind of formed a routine that, although not religiously followed each and every day, I try to go through the same steps daily to keep my lists fresh and ideas generating. Below is an accounting of the steps and a pointer to the lists that I have recently began publishing so that you may see them.

Background

I keep a lot of lists around but there is a method to the madness. Basically I have two sets of lists; lists that make up the basic market sectors where I store charts that are of interest to me and lists that I used to manage new ideas and possible trading setups. This discussion is about the latter group of watch lists.

List Management for New Ideas

The basic structure of how I maintain them is based on time frames. There are a total of six lists that I'm constantly working. They all start with the word Action and then their function. For example, one is called Action-Long and another Action-Short which are my two primary repositories of stocks that I've been following recently and still look to provide a tradeable setup in the near future. The are my longer term lists with respect to time frame.

Moving into the shorter time frame, each day I create a list of potential trades based on scans or other sources of information. That list is called Action-Daily and I maintain it and all the other lists talked about in this article as shared watch lists on Prophet Net. The page that you open by clicking on this link is a list of all shared watch lists on Prophet Net. You can find my personal lists by searching either in the Name column or the Owner column of the table that is presented. The name is the name is the name of the list (ex. Action-Daily). The owner is my moniker on Prophet Net, tradechatter. Since I already maintain my lists on that site, the simplest way currently to share them with you is to simply publish them and show where they are.

Daily Activity

Most every day, I go through the following process:

1. The first action is to review all stocks in the Action-Daily watch list. If they still look promising as an entry in the next day or two, I leave them there. If not, I look to move them to the Action-Weekly watch list if I believe they may offer a move in the coming week. If they appear as if they are still promising but will not move relatively soon, I move them to the Action-Short or Action-Long watch lists. If they no longer look promising I throw them away (remove them from the lists). This leaves me a relatively clean Action-Daily watch list
2. Next, I execute my nightly scans. If the stocks I uncover during scanning look to be immediate plays, then they go into the Action-Daily list. If they look like they may offer an opportunity within the next week, I'll drop them in the Action-Weekly watch list. Again, if interesting but not likely to produce an entry point within the coming week, I'll drop them into the Action-Short or Action-Long lists
3. During the trading day I often glance at the stocks in all my lists looking for action (up or down). I typically have the lists sorted by percentage change in price, so it's easy to spot those that are moving. If I see some unusual activity in a given stock, I'll look to monitor it more closely and may move it to Action-Daily or Action-Weekly watch lists

In case it isn't obvious at this point, the Action-Daily list gets the most attention each trading day. It is where I make new purchases or sells. The Action-Weekly list also receives attention because stocks there could begin to move at any time but nothing was urgent when I last reviewed them.

Weekly Activity

Once or twice a week I try to work through every stock in the Action-Weekly watch list to see how they are progressing. Just as with the daily routine, I either upgrade stocks to the Action-Daily watch list or downgrade them to the Action-Short or Action-Long lists or get rid of them altogether.

Earnings Activity

When earnings season rolls around, I keep an Action-Earnings watch list were I work through all the charts of those companies that have recently reported earnings and if there is an interesting setup I'll add them to this list. I only do this for the first 4 to 5 weeks of each earnings season as 80% of the companies report during that period. I do not look at every chart but a lot of them and I try to be reasonably selective on charts that are of interest. I typically do this each weekend. As with the other watch lists, when I'm ready to work this watch list, I first quickly look at the charts already in the list and cull them from the list quite liberally unless they are still of interest. Again, I move them appropriately to Action-Daily, Action-Weekly or Action-Short or Action-Long.

Recent Trades

The only other short term watch list I maintain the Action-RecentTrades watch list. Many times I will re-enter recent trades once they set back up again either from the long or short side. Since they tend to offer good continuing trades, I don't want to lose track of them and keep them in there own list. I periodically review them when I have time during the trading week and move them to an appropriate list as described above.

Summary

It's not a perfect list management scheme by any means but if you depend on a fresh set of ideas for trade setups, having some sort of list management scheme is necessary. The system I've outlined is what I use. You can find these lists on Prophet Net.