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A day trader’s basket may be any number of stocks. A good average could be somewhere between 25-50 stocks. But it may also be larger or smaller. I have known traders that traded one stock all day long and nothing else. I have known others that were able to watch 300 stocks. Personally, I think that is way too many.
When I was trading I had a basket of about 75 stocks. Some I knew were only going to be in play on news or when reporting earnings. Others were fairly reliable moves on a daily basis. And still others were extremely sensitive to any sort of news or event.
Today, if I was going to put together a basket of stocks, I would be looking at
following symbols: GOOG, TASR, TZOO, AIRT, QLGC, SYMC, PLMO, KMRT, EBAY, SINA, RIMM, RMBS, PCLN, and DCLK as well as other NASDAQ stocks. I would not over look New York Stock Exchange stocks, although many do. I would be looking at: MO, PFE, CAT, GE, GM, TYC, MRK, MOT, and others as well. Keep in mind, I am not recommending any of these stocks specifically for you to buy or trade. I am merely trying to give you an example of what a basket may look like. You have to decide yourself what stocks you would add to you your basket based on your own knowledge gained through experience and research on each stock.
I think every trader should have a basket of stocks he or she follows and trades. Day trading without your own basket raises risk level and puts you in a position where you are always looking for something to trade. On slow days where market is just not offering up much in way of trading opportunities, you may have a tendency to jump on stocks, that under different circumstances, you would have passed on. Having your own basket of stocks will lower your exposure to risk. They may not move any better under slow market conditions, but at least you will have some knowledge of how they move. In Part II I will tell you about a special trading basket technique I used during early boom days of day trading. It may still be a valid concept today.
Floyd Snyder has been trading and investing in the stock market for three decades. He was on the forefront of the day trading craze that swept the nation back in the late1990's both as a trader and as the moderator of one of the Internet's largest real time trading rooms. He is the owner of http://www.TraderAide.com , Strictly Business Magazine at http://www.sbmag.org www.FrameHouseGallery.com and www.EducationResourcesNetwork.com
