How to find the right stocks to trade

Although, I have shared my watchlist with you, we will go through the process of creating your own watchlist. Selecting the right stocks you trade is as important as learning our trading methodology. Stock selection is not about getting “secret stock tips” from some online forum. The process has to be diligent and meticulous.

Here is a quick summary of the criteria:

  • STOCK PRICE
    1. Greater than $100

     

  • VOLUME

    1. Stock should have >= 1 million shares trade on a daily basis
    2. ATM options should >= 500 in volume
  • OPEN INTEREST
    1. The open interest should be >= 1000
  • BID/ASK SPREAD
    1. Tight bid-ask spreads are better. If The open interest and volume criteria are met, the bid/ask spread will automatically be tight and will fit our criteria

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