Could you give some guidelines as to which stocks an individual should focus on? Do you agree with the school of thought that an individual should become familiar with a handful of stocks and focus his/her trading on those stocks?
We cover many potentially profitable plays in our reports. There are always many different plays that fit each investor's goals, and we try to give a wide range of plays that we think are money makers so we can have plays that appeal to as wide a range of our subscribers as possible. Many subscribers have particular types of patterns they prefer to play, particular prices for issues they prefer to play, preferred types of plays (pre-split, earnings announcements, etc.), etc. With all of the information, you can get lost.
That is why we choose the plays that look best to us each report. This rotates depending upon where a stock is in a pattern. One stock that set up a great pattern may have blown out of that pattern and is no longer in a good buy point as it is extended. Another pattern may have collapsed. And yet another may still be hanging in there. What we do is pick the plays we like the best as our 'focus' for the day or week. We tell our brokers about those plays and what we are looking for. We then put them on our real time service and even set alarms at certain points for particular plays. We either see it ourselves or get a call from our brokers when one of our stocks gets to a buy point.
We also keep other plays on the burner, watching them but not with the same keen eye. We love wedge and pennant plays-they can have explosive moves and we need to be ready when they break. We have those in a separate group that we watch with alarms on them-hit a certain price, an alarm goes off.
As with all investors, we have our 'favorite' stocks, stocks that we know very well and stocks that we play with confidence when certain patterns are set up. While you want to avoid 'seeing' things that are not there in your favorite stocks, having confidence in certain patterns on a stock will help you make better trading decisions and allow you to 'take the plunge' and make gains as opposed to getting right to the edge and then not making the trade. That is the downfall of many investors-they do all of the homework, know what they want to do, and when they see the move, they don't make the trade or try to buy at an impossible price, attempting to save a quarter point on a play that could have yielded a $10 gain on each option. In that sense, knowing a handful of solid, leading stocks is very beneficial to your trading.
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