The active trading list expands

I keep waffling between sticking to ten stocks on my hit list and all 50+ stocks from my visual scan last week. I looked over my 10 list and looked over my 50+ list, why should I myself to ten stocks? I figure that, as long as I am organized, there is no reason that I cannot place trades up to my cash (and margin) balance in each account.



Pros to using all 50+

-more trade setups at any particular time = more money in play

-more trades = smaller loss allowances per trade

-more selection for sector rotation or just diversification

-feels like I am doing more work toward trading, no boredom

-better selection of price ranges to use in the varied size of my accounts



Cons

-overly complicated if not organized well

-should there be many trades selecting which ones are best could be an issue

-possible over exposure to one or two sectors

-lack of familiarity with any particular stocks



Pros to using 10

-easily managed trading

-familiarity with stocks and their tendencies

-always enough capital to take all of the trade setups (with the exception of a lot of shorts)



Cons

-small sample base to use for studies

-fewer trades means that cash may be sitting unused

-leads to larger position sizing to get money working more often

-boredom as there may be little activity some weeks



Well, there is no glaring point that stands out for or against either method so I feel that it is more of a personality issue. I liked the daytrading, kept me active while keeping me from too much studying after trading hours. Daytrading is hard to work on when not trading even though I do reading and whatnot to keep up to date with some of the blogs that I follow.

This trading method reduces the intraday work, by close to 90% and allows most of the studying and trade determination to be done on weekends or evenings...even placing the trades can be done after or before hours.

The only one real drawback that I see is having money in play overnight and, especially over a weekend. I am more prone to gaps. Now, I am hoping that gaps will more often than not go in my favour only because the support levels that I am using may tend toward a favorable move but I am realistic enough to know that news sometimes forces gaps in either direction without regard to previous history.

I am setting up to use the full 50+ list for active trading. I have printed all the current P&F charts to use for manual notating. I can scan through the charts and see the setups in about 10 minutes. A quick note for each stock's trigger and a separate note for each one approaching it's respective trigger to setup trades.

Today I have 12 stocks nearing a trade entry. I have four active positions, two of which I may just liquidate to free up the cash as they are not on my new list. I will need to determine which ones are actionable based on account balances. My short sells are restricted due to the small margin account and most of the setups are shorts...shame.

It comes down to the fact that the trading decisions are pretty simple to make based on using support and resistance on a P&F chart so there is no reason not to be able to make more. Exits are cut and dried as well so there really is no trade management to mull over. Trigger, trade, scale in, stop set. The only hassle is knowing when and where to move stops but even that can be cut down to two or three strategies depending on the chart pattern.

Jeff.