How many stocks should I watch during a trading session?

Hi Mike,

My name is Jonathan. I am a relatively new trader and I began reading your first book One Good Trade. I love the idea of your if/then statements and I would love to work on my own statements. I have a list of plays I believe I have the most edge in, one being red to green or green to red i guess you can also call them day 2 plays, although you don’t necessarily have to have a strong bull or bear day for them to work.  My question to you is about the number of stocks on a beginners watch list. Usually I will have no more than 6, however that causes some paralysis by analysis in me and i end up making mistakes. I am not sure if this is due to having too many stocks on my screens or maybe it’s simply that i don’t have a solid plan for each one. In the book you mention that you guys and SMB narrow your list down to 2 main watches. Is this what you think is best, and once you have these 2 do you ONLY look at those or do you keep scans up for other potential plays?

Thank you very much!

I’m going to read The PlayBook next  ( only on page 80 as of now of One Good Trade)

Jonathan

@MikeBellafiore

The answer depends on your experience, skill level, and ability to process information.

At the start of your trading career, I really like your idea of honing in on 2 stocks to trade in a session.  After and only after you show success watching 2 stocks, then increase the number of stocks you watch during a session.  Perhaps then jump to 4 stocks and measure your results.  If you have success with 4 stocks, then consider increasing how many you watch.

One trader at the firm has an issue trading too many stocks during a session.  The trader implemented a rule to trade only 3 stocks during a session.  The next day he traded much more than 3.  I responded, “(Trader name) seriously you said 3 stocks yesterday.  Spend tomorrow on the demo. Violating rules have consequences.”

One of our top traders has an extraordinary ability to process vast amounts of data at once.  For him, it is best to trade many stocks at the same time.  From today here is a list of stocks he traded in his main day trading account:

He traded over 20 stocks during the intraday.  And he traded them well, most importantly.

Plus he traded 4 stocks in his long term account.

Plus he traded options.

Plus he traded futures.

Now, he is a Black Shirt Trader, and has this unique ability to process information.  But I raise this because there is not a one correct answer for all.

Having said that, I do love the idea of taking it slow when you start, having success that you measure, and then expanding from there.

*no relevant positions