Building a watchlist can help a trader stay organized and identify investing opportunities.
There are thousands of stocks traded in the U.S. exchanges, according to Statista, a statistics portal providing market and consumer data. Even for the most dedicated trader, that number can be overwhelming.
A watchlist can help traders focus on stocks that fit their trading strategy. Whether they prefer tracking by numbers or viewing a series of charts, traders can customize their watchlists with the symbols they want to follow.
What Is a Watchlist?
A watchlist is a list of securities that shows certain information about a company’s stock. This set of information, such as the bid/ask prices or the percent of change in price, can help investors make decisions. Building a watchlist can help a trader stay organized and identify investing opportunities.
In the Score Priority Trading Platform, you can create and manage watchlists by selecting “Add to Favorites.”
As you build your watchlist, these steps may help you organize a list that fits your trading plan.
1. Identify Your Trading Style
First, ask yourself what kind of investing you plan to do. Are you a swing trader or do you prefer trading mostly intraday? Do you follow a company’s fundamentals, technical indicators, or a combination of these? Understanding your trading plan can help you identify stocks that fit your individual strategy, timeframe, and style.
2. Select the Securities
The securities on your watchlist should fit your trading style. For example, you can build a watchlist based on industry, where you can compare stocks’ performance within the same sector. You could also build a watchlist based on the size of the companies, such as large-cap stocks or penny stocks. However, you may want to avoid choosing too many companies for your watchlist if you suspect you may lose track. Instead, you can limit the number of stocks on your watchlist — and the total number of watchlists — to something you feel comfortable watching, then add more as you feel comfortable.3. Choose Your Requirements
Determine the conditions for your trades based on your trading style, then scan listings of stocks that fit your criteria.
4. Consider Alerts
Setting up alerts for price movements and changing technical conditions can help traders find opportunities when they aren’t studying their watchlists. An alert sends the trader a notification when the price of a security hits support or resistance levels, becomes a break (meaning the price moves dramatically), or other price changes. This notification could be an email, a push notification, or both.5. Stay Organized
Review your list often to see if the securities on your list still match your criteria. You may even consider splitting your watchlists into different categories, and you may even add the same stock to multiple lists. Regularly editing your list can help you manage your watchlists.