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Swing Trading Stock Ideas - How to Screen Stocks Transcript
1. Title Slide
Welcome back traders, this is Roger Scott from market geeks
with another video tutorial for you today. I want to personally thank
everyone for visiting our channel and please don’t forget to subscribe
for trading video updates and trading tips.
Today’s Video Tutorial is going to be Swing Trading Stock Ideas
Screening Stocks so let’s get started.
Many traders especially those who are starting out are looking
for stocks to add to their swing trading stock ideas list or as I like to
call it the hit list. This list is very important because it makes up your
pool of opportunities, so you have to make sure you screen these
stocks or ETF's for the best possible selection.
There's nothing worse than picking stock X from your list and
finding out after the fact that if you picked stock Y you would have
gained substantially more profit per trade. These basic blunders can
easily be avoided by using good screening guidelines.
The first factor you want to look for is volume. Make sure your
stock or ETF has an average daily volume over 200,000 shares.
While this is actually a fairly conservative figure, there is a reason
why my threshold is low. Some stocks that have volume of less than
a 1,000,000 shares per day are ignored by institutional traders or
mutual funds. The less institutional sponsorship your stocks have the
less correlation they will have with the rest of the market.
The second screening factor you need to pay attention to is
volatility. I have several ways I screen stocks for volatility, some are
very simple and some are very complex. For the purpose of this short
tutorial I will keep it extremely simple and once you get comfortable
you can always expand on this. But in a nutshell you want to make
sure the stocks you are trading have a daily dollar range above
$2.00. This means on average the stock has to swing about $2.00 or
more per day.
Some stocks go through periods when they are volatile and other
times when they are calm, what you want to do is only look at the last
10 trading days or two trading weeks. What you want to see is
volatility increasing to a point where the stock is covering more than 2
bucks in trading range each day.
In addition, I would stay away for stocks priced under $20.00;
they typically don't have a wide trading range on a regular basis and
tend to be less volatile overall. So remember when adding stocks to
your swing trading stock ideas list, you want to avoid stocks under
The biggest mistake beginners tend to make is ignoring
correlation rules. Correlation is one of the most important factors as
far as risk is concerned and ignoring this one rule will increase your
risk and as a result decrease your odds of being profitable.
Correlation in simple terms is how closely your stocks follow each
For example, if you look at two similar companies in similar
industry groups they may follow each other and trade almost
identically. If you take two stocks from two different industry groups
like shoe manufacturing and gold or software manufacturing and oil
production companies, your correlation will tend to be less significant
between the two stocks. All stocks have some degree of correlation
to the general stock market, the more institutional sponsorship a
stock has the more it will correlate to the stock market. This is one of
the reasons why I mentioned picking stocks with reasonable volume
but not too much volume, these stocks will be less correlated and will
give you some diversification.
There are indicators and tools to help you make these
determinations mathematically as opposed to visually. However,
there is no better way to learn this material in the beginning then by
actually looking at the markets and figuring it out on your own.
That’s it for today’s short video tutorial. If you have any
questions about swing trading stocks please visit us at
Don’t forget to subscribe to our channel for trading videos and
trading tips. This is Roger Scott wishing you all the best and a