Generally my suggestion when you are trying to trim down into a watchlist of stocks to look at from a price action trading perspective, my suggestion is try to have as many stocks in our watchlists as you can. But of course (depending) on your available time. Okay, if you have all the time in the world and you have all the energy in the world that obviously you want to look across as many stocks as possible.

Okay, and now I’m going to explain the reason to you why. But generally my suggestion really is to try to have between 100 to 150 stocks that you monitor regularly. Okay, so if you are trading across different stock markets, then naturally this 100 to 150 is going to be spread, ideally spread across different markets. Like for example, as GS stocks, you could be looking at US stocks, you could be looking at Hong Kong stocks and ideally spread across the different sectors within those individual markets as well.

Okay, so this is generally my preferred and my suggestion of the number of instruments to have in your watchlist for you to be able to scroll through and monitor closely for trading ideas. Okay, and the reason is this, when you have at least about 100 to 150, okay, the chances is that you are very less likely, very unlikely to actually decide to trade on some optimal ideas. Because when you have a 100 to 150 stocks, there’s so many choices out there that you will probably be thinking more about, “Okay, which idea should I take and which idea should I reject?”

So once you have more choices out there, you tend to be more selective in terms of the kind of trades that you take, which might help you to enhance or ensure that those trades that you take are the quality ones.

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Philip Teo

Founder & CEO at Traderwave Pte Ltd
Philip Teo is an entrepreneur, speaker and trading coach who specialises in the field of Technical Analysis of the financial markets. He is currently the Founder and CEO of Traderwave Pte Ltd, a financial technology company that offers a web charting application to global traders. He has conducted many trading seminars and appeared on national television before. He is also currently an official speaker and trainer with SGX Academy. Learn more about him at his Google+ Profile, LinkedIn Profile and Facebook Profile

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