Ask Colin

There are too many stocks to look at all the time, how do I narrow them down to the key stocks?

This is a very big question. I recently did a three-hour presentation to Shares subscribers and did not cover it all.

I note that you are an Insight Trader user, so you have a great tool for the purpose.

Basically, how you determine your list of stocks will flow from your trading or investing plan. Your plan should specify how you go about selecting stocks and what your entry signal is. There are as many trading plans as there are traders, so it is a very individual thing.

If the idea of a trading or investing plan is new to you, you might like to think about buying the videotape of my seminar, which explains my trading plan as a model for you to develop yours. Details are on the Videotapes page on my Free Access web site

Once you know what your plan is and can define your entry signals, you can use Insight Trader to find the stocks. Two ways to do this are:

1. Go through the whole market, say, once a month. Note any chart that looks as though it is near your entry configuration and set an alarm at the appropriate price. Then, if the stock hits the alarm, you will have it on the Hilite list for that day, which is generated every time you update your data base. You just set up a template chart and run Generate Chart Arrangement for each day's Hilite list and you have your hotlist of charts.

2. You define your entry condition(s). You run a Systems Module filter run on those conditions each day after downloading your data. Say your entry condition is for weekly MACD to cross up over the Signal line. You run the filter. Set up your template chart and Chart All stocks that come up on the filter report. You now have to review only the charts that meet you entry condition on each day.

So, Insight Trader is a smart tool to find the stocks you want to look at. But the key is to know what you want to look at. Determining that is the hard bit, but only you can do it, I cannot do it for you.

One of the ways I do this for my value model stocks is discussed in the article Finding Value Stocks, which is on the Articles page of my free access web site.