I have noticed a tendency of traders to seek out trades using scans.  That can be an effective way to find trading ideas, however, I prefer to build a watch list of stocks and become intimately familiar with each stock in that watch list.

I know that each stock on my list is solid fundamentally and I am certain how the stock competes against others in its “space”.  The stock is usually “best of breed” and I know how it reacts at earnings and to other fixed news events.  I know if the stock has a habit of pre- announcing its earnings.  I am familiar with whether they typically make other important announcements at earning such as stock splits, buy backs or product releases.  I know whether forward guidance is usually understated or aggressive.

Stocks are like people in that when presented with outside events or circumstances, they will react in different ways.  Some will take challenging news in stride while others tend to overreact.  This gives me an edge over other traders who do not ‘know” the stock as I do.  Consider building a watch list and get to know your stocks.  I think you will find it to be well worth the time and effort.  Best, Robin

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