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Mastering Watchlists: Your Essential Guide to Efficient and Effective Stock Trading

Updated: Jun 29

I’m continuing the series on the top 6 ways I minimize my trading time. In the previous post, I discussed my watch list organization.

Think of your watchlists as a tool to help you stay focused your watchlists should be created in conjunction with your trading plan. They should help you sort through the mountain of stocks to trade within minutes and minimize your trading time. So be sure to build watchlists for the strategies in your trading plan! Side note: If you don’t have a trading plan, you need to create one. If you want to be consistently profitable and successful you need your own trading plan. If you are just starting out use someone else’s plan! It’s not plagiarism it’s avoiding having to reinvent the wheel.

You should create your watchlists based on your 'favorite' stocks (discussed last week) and your favorite strategies. When I talk to traders many of them don’t spend time building watchlists in a meaningful way and even fewer maintain them. This is a call to action for you to take advantage of this valuable tool. A well maintained watchlists builds the foundation for freeing up your time to take the best trades using strategies from your trading plan.

I learn though examples, so I’m going to share my process. Keep in mind everyone is different. My risk tolerance, my account size, my methods are probably not the same as yours, so make your on process, but you can still apply these principals.

Watchlists by strategy

Daily Index: The first thing I do is review my daily watchlist that I check every day before the market opens, just to gauge the mood of the market, looking at the major indexes. I discussed this last week.

Selling puts: is my favorite strategy for so many reasons (I’ll dedicate an entire article to this soon!) So as soon as the market opens, I sort my main watchlists by percent change, I’m looking at over 200 of my favorite companies having a big down day (put premium is higher on down days).

Dividend Stocks: You already know I have my favorite dividend stocks on a list, so I will sort this by % down looking to buy shares or sell puts at support depending on the next ex dividend date and premium of the puts. I also check the calendar that I discuss at the bottom of this article under Built-In watchlists.

Pillars: I keep a list of stocks I believe will appreciate over time, quality companies that are more investments than trades. (I'll def trade these as well, but this list is mainly longer term). This isn't something I look at multiple times a day, but I do review this watchlist just looking for opportunities. This watchlist is more so, to make sure I have all my alerts setup (which we'll discuss next week).

Sideways stocks: Theta decay is my best friend, it might sound weird but I actually keep up with stocks that are consolidating for long periods of time. This list is subjective and as I review other stocks I will often add them to this list.

These are just some examples, you should have a watchlist or a stock screener (either through your broker, or using a site such as finviz) to sort through the mountain of stocks out there!

Maintaining your watchlists

Don't make the mistake of building a list and not maintaining it! Taking a couple of minutes to update your list will save you time in the future. Take a couple of minutes for the following maintenance tasks:

Adding and removing stocks from watchlists: The more you trade, the more comfortable you get with your strategies you'll discover companies that become your favorites to trade as well. Conversely, you'll also identify those that seem to lose for you. After a few losses on the same underlying stock, I remove it from my list. After all, there are so many other stocks out there! Keep adding and removing companies that fit the watchlist on a continuous basis.

Add Support and resistance: Start adding support and resistance to the charts in trading view. I like to color code my lines. Make your own system, but when I see a thin purple line I know there is weekly support or resistance (blue lines are normally on the daily chart), and if you add a line today, it will be there for months and years to come! As you can see on my apple chart, yes it takes a few minutes, but I promise this saves you so much time in the future! Remember buy at support sell at resistance is a money making strategy. Here's an example from Apple:

Color coded watchlists

Trading view has color watchlists:

I strongly recommend you create your own system using the colors. I use these dynamic lists mainly for the short term or positions I’m currently in. This is obvious, but I want to remind you that you can not have the same underlying on two different colors! So that's why I try to use these for short term.

Again this is my system and just to give you some ideas, you should make your own system!

Red= Positions I’m in that are losing and I need to monitor (I also use alerts, more on this next week)

Blue= I use this for stocks that have a MacD/Dmi Cross (from my alert list)

Green= Stocks I’m looking to get into bullish

Orange= Upcoming Ex-dividends

Purple= Stocks I'm looking to get into bearish

Pink List= Stocks that trade sideways.

For example if I’m going through my dividend watchlist and I see a stock that might be a good buy, I’d tag that stock to the green list. (so its on my dividend list and it’s also on the green list). Then I can just sort through the green list when I’m ready to add more bullish delta to my account!

So you can see I create my own watchlists based on criteria such as dividends, profitable companies, companies trading sideways, etc. Then as I run through them I color code the ones I’m super interested in the short term. This lets me keep a broad list of stocks that work through multiple stock rotations, but I can run through the color list through the week to save time!

Built-in watchlists:

Do not underestimate the value of default watchlists from your broker, tradingview, or stock screeners like finviz. You do not have to reinvent the wheel, if the broker or website has the information out there and it’s ‘free’, use it! Here are a few of my favorites:

Dividend Aristocrats: I search by IVR- as discussed in the dividend series the premium on these isn’t as much as a growth stock, but looking for higher than normal premium in a company that pays a dividend is a favorite.

Liquid Symbols: If I’m low on trades, I don’t see anything great on my watchlists or alerts I’ll use this list (again sorted by IVR) to look for trades.

Think or Swim:

This process is definitely not as optimized as I should be. (we all need work, right?) I used to use dividend websites to find upcoming ex-dividend dates (this is the date you need to own shares to get paid the dividend) but the sites normally try to sell you a subscription or their data isn’t that great. Each Sunday I go to Marketwatch, only check the dividend box and see which stocks are going ex dividend the upcoming week. (pro tip go ahead and click on Monday of the following week in case there is a Monday ex dividend date).

Trading View

Hotlist: Trading View’s hotlist is a ‘fun’ list showing which stocks getting traded the most. Even if I don’t make a trade it’s good to know what is moving and see if there is a trade out there.

The key for me is finding a system that I understand, maintaining the lists, adding support and resistance to the charts, and removing stocks that lose repeatedly. If I find a new stock I’ll add them as soon as I see it. It’s about remaining active and not taking the power of a well maintained watchlist seriously.

Setting Alerts and getting notifications are also a key to minimizing my trading time. I’ll discuss my system next week to help give you some ideas on how you should incorporate them into your trading plan!

If you found this useful let me know! I love talking to people interested in trading (a quick thanks is always nice too). If you want more information you should join the GKT discord to discuss these tips in more detail and connect with like minded people who trade the stock market!

Keep Calm and Let Theta Do the Work! Until next time

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