Getting Organized

In my last post I recognized that I've become a bit lazy in my approach to trading during the extended bear market. While I think my discipline has improved, my attention to detail has waned. The first action I took to address the issue was the documenting of my buy rules and position sizing plan. Today I'll take the next step and develop a plan for watchlist tracking.

I'll bet this is one of the most commonly ignored tasks by traders, and one that can materially improve results if it's done seriously. My coworker is a successful CAN SLIM investor and the first person to suggest to me some key items worth tracking on a watchlist.

What I think makes the watchlist so crucial is the insight it can offer in post trade analysis. Certainly I can always go back and look at a chart from the time I made a purchase, but with my watchlist I can track the some details like which screen identified the stock, what price I first noticed it, what the group relative strength was, etc. This allows me to later filter down the results of the stocks that make my watchlist and refine my process.

I'll learn if I'm more successful with stocks from a particular screen, or chart pattern, or industry group. I'll see if I avoided buying winning stocks and bought losers - and my notes (if kept properly) will tell me why I made these decisions. I also incorporated a link to the charts.

For anyone who loves free Internet resources like I do, google spreadsheets are great for this purpose. You can access them anywhere, share them with friends, and they have nifty functions built in which allow me to embed a live stock price and a link to the charts which I upload to my picasa account (picasa is a tool from google to manage images).

A quick note on the market - I'm starting to see more weakness than strength in the leading stocks. I don't know if the rally is over, but I'm in a bit of a wait and see mode now. (ARST) is holding up alright, and I see no need to pursue another purchase until a powerful looking stock comes along.