Stock picking revisited

I mentioned my stock picking criteria early on. I have since changed them to provide more, and lower priced stocks to choose from.

The original: $10 to $30, greater then 200K shares per day volume

The new criteria: $5 to $30, greater than 40K shares per day volume

I have the $30 still as it is good to see the stocks that are downtrending early on even though I probably wouldn't trade them long or short until the $20 mark. I wonder if I should do the same for the under $5 range..perhaps go as low as $3 to watch for ones that might be on their way up. Much lower than that and the margin use rules change as the broker considers anything under $2.50 as penny stocks.

The lower price and volume expands the selection and has:

PROS
1) allows some exposure to stock with smaller prices that will allow for tighter stop setting off the start
2) perhaps a little more price volatility
3) I am only trading single lots or 100 shares at a time I am not terribly concerned about not being able to sell when I need to, liquidity should not be an issue at 40K average volume for small trades
4) the lower prices allow more trades to be entered simultaneously

CONS
1) I might not get my ideal price
2) at $5 I would not likely short the stock, limited to long positions at the lower price
3) lower volume MAY make shorting less possible depending on share availability through the broker...I honestly don't know if 40K will be low enough for that to happen
4) perhaps a little more price volatility, good and bad I guess

Worth noting: Lowering the prices to this point would actually allow someone who was interested in starting out with $1000 to actually be able to make a go of it. Staying under $10 might be possible and using margin wisely could allow four trades if they averaged $7.50 at the entry price, more if even lower prices were used. Price movement is price movement afterall, whether it is at the $200 per share or at $5 per share.

All in all this has increased the selection somewhat as I started out with 256 stocks to narrow down to about 17 that were showing signs of being in a tradeable pattern soon to add to my list. For the record that takes about 30 minutes to do with the stockcharts.com candle glance view. I just jot down the ticker symbols of the charts that look good and enter them into a list then view them in a 10 per page format using my default 2 year period with a MACD indicator for reference and a few moving averages. I do get duplicates but I usually am familiar enough with my current list to catch them before they make it into my working list.

The list now has about 140 stocks, 10 or so are higher priced than I will trade but I am watching them...financials mainly. I have only traded about 12 using my plan...about 35 previoulsy traded and most of those are still on this newer list. I will try to keep it at less than 200 as anything larger then that may be to unwieldy to manage efficiently. Some will get pruned along the way and some will get added.

JD.