Having a well-researched and ever evolving watchlist can be imperative for a trader’s success. The key in my opinion is to keep it tight and relatively small. The bigger it grows, the bigger the chance that opportunities will be missed. If there are fewer underlyings to watch, the less the chance an opportunity will be overlooked.

There are so many different scans and services out there that a trader has at his or her disposal it could make your head spin. The thought of having the best candidates at your fingertips can be quite exciting, but it can sometimes be a little overwhelming too. Now, by no means do I mean to say never use them because I use a few myself. But truth be told, probably 70% to 80% of my option trades come from a small list I have used for quite some time now.

I have found that if I keep a list of about 20 stocks, I can recognize opportunities where I put the odds on my side easier. Instead of looking everywhere, I can hone in and have better results. Some of the stocks that make up my personal watchlist are Apple (AAPL), Amazon (AMZN), Netflix NFLX) and Facebook (FB), just to name a few.

Of course, there will not be an opportunity every single day on these stocks or even every single week. But I have found that if I am patient, opportunities present themselves more often than not. Consider narrowing your watchlist, and I think you will find more opportunities with fewer stocks.

John Kmiecik, Market Taker Mentoring