How to create an efficient stock trading routine

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Hi, this is your Trader of Stocks. Learn the weekly and daily routine of a swing trader to sync yourself with the market and create powerful trading ideas on the fly! A routine is not about stubbornly running screens and pasting ticker symbols into watchlists.

It’s art and not science

As an aspiring trader coming into touch with the markets for the first time you should spend almost all of your time reading books and digging through as much information as possible. Typically the first thing of interest is the art of picking stocks, this is because as a young gun you likely come to the quick conclusion that identifiying future monster stocks has to be 90% of the whole stock market game. So you naturally seek sources for reliable stock ideas. Some read the news but most will simply follow other traders online.

Chaos is the constant during this intial phase as you are overloaded with information! This is especially true if you had no prior background in finance. But that is alright at this point.

You want to gather as much information as possible and saturate your mind with new impulses. And while the entropy of that information is high early on you’ll learn to handle it over time. The main thing is that you have that information hidden somewhere between your ears.

Just expose yourself to the noise early on!

After a while you realize that you can too, find stocks with the help of a screening tool, so you start building screens and before you realize it you created a myriad of different screens for all kinds of stuff. Overnight gap ups, upcoming earnings, high volume movers, stocks with strong fundamentals, stocks with strong technical action… the possibilities are endless.

You start to believe that all you need is the perfect screening criteria to mechanically receive a condensed list of 30 stocks which are poised to turn into monster stocks!


Been there done that and some more!

Before I show you how an effective stock trading routine really looks like I will first briefly explain to you how my own routine changed over the years. I have high hopes that you can relate, which makes it much more easy for you to actually act on my advice thus saving wasted time on the learning curve.

However, I am afraid that most traders must try to reinvent the wheel first, before they can accept certain higher truths. I was one of them as I tried to outsmart the markets by gathering and evaluating data like a mad man during my early years.

The reason for this is twofold. First you need a routine which is able to yield you results even when you are short on time or stressed.

Secondly you must be open minded and relaxed in order to come up with trading ideas and potential short term scenarios on the fly. You can compare this process to your days in school. Remember how the guys who actually paid attention each and every day didn’t had to put in any extra effort right before the exams? I am sorry to tell you that you too have to do it like they did.

A routine should not yield a list which you then go through afterwards in order to come up with ideas. The ideas are born while you screen and go over charts. When the (weekend) routine is completed you should be ready to trade with a just a couple precise trade ideas in mind.

A trading routine must not feel like work. It is actually the time when you sync yourself with the market so that you are one step ahead when the bell goes off the next morning, or midday as in my case.

In order to trade independently you have to complete the following tasks routinely and without external help:

  • Coming up with fresh trade ideas
  • Maintaining your portfolio
  • Be up to date with the broad market
  • Be aware of major events and or news

Read on to get an idea about how my routine evolved over the years. As I write this sentence I am freaking excited to go back and dig out my old stuff. I have to recall some of it from memory but this will be fun.

Let’s go!

The evolution of my trading routine

Year 1 – 2: During the first year I read a lot of books and articles and was looking for traders to follow online. After a while I figured that William O’Neil is a good start and I subscribed to eIBD and MarketSmith. I went over charts of monster stocks from the past and wrote down all the info from all those books into my notebook. It contains the condensed information of roughly 50+ stock market books and has the unique ability of being totally useless, but I didn’t know that back then.

Year 2 – 4: When I started trading real money I ran narrow screens like crazy. I recall having roughly 30 different screens which I ran over the weekend and 16 of them each day before the open. I was flooded with stocks and information. Around that time I started to create a sophisticated Excel spreadsheet where I gathered an incredible amount of data. I spent 90 min each and every morning going through eIBD, running screens and pasting data into Excel.

This rigorous and “scientific” trading routine turned out to be a monumental waste of time and effort. It is my biggest trading failure for sure .

Year 5 – 7: I dropped the “almighthy” spreadsheet for good and never looked back. I started to follow only one guy online (Gil Morales) and dismissed all the remaining outside noise. After a while it became clear to me that you can’t treat trading like an exact science.

The only data I collect today is statistics about my own portfolio and my trading history, nothing else!

Oh yeah and I obviously collect my real time ideas and thoughts on Twitter.

Over the years I switched from the overloaded and clunky charting package I used during my initial years to Tradingview for the charting and Finviz for the screening. The main reason is simply because both tools are lightweight and have outstanding syngery when it comes to speed. Speed is very important to me as I need to go through hundreds of charts in rapid fashion. They also run on almost every computer, or mobile device.

I also switched from maintaining 8 to 10 watchlists to only 1 which I like to refer to as my own little stockmarket within the stockmarket.

Around that time I realized that you must treat portfolio management as a science and stock picking as an art. I put a lot of effort into evaluating my portfolio ever since and preserved some science to fulfill my intrinsic desire to calculate things.

Year 7 – 11 (present): I cut myself lose from Gil and started to dodge the financial news altogether. I sometimes take a glimpse at the news at the front page of Finviz but that is pretty much it. I do check the news when I see strange behaviour in the stocks. When I say news I am referring to news stories and not important political and economical events. I am of course aware of elections, trade war talks, FED policy meetings and all that kind of stuff.

I started to treat and run my twitter feed @ThweisSXFX as my journal (every trader must have an idea journal) and it helped a ton to write down my ideas more conscientiously.

I made it a habit to dodge everything (news, tips, true account balance…) which has the potential to trigger powerful emotions such as fear, greed, hope or anger.

You can read more about my journey in greater detail here.

Screening for stocks, ZEN-like!

This is how my screening routine is set up today. This is what I do to find the trading ideas I come up with on twitter. It is a honed routine and every little twist bears a meaning and solved a problem or issue I encountered in the past.

Basic Quality Screen: Effective Market Cap: >220M USD ; Price: >7 USD; Average Volume: >150k; Daily Dollar Volume: > 2M USD

Only consider names where the product of float -not the outstanding shares- and price is >220M. This is what I call the effective market cap and it helps to dodge low float names which are prone to dilution. One can then go on and create various narrow and wide screens including one or both of the following fundamental criteria.

Fundamentals: Forward Yearly EPS growth >15% and/or Quaterly Sales Growth > 20%

You should play around a lot with those parameter and screen for either huge sales or huge forward EPS. I adopted the forward EPS from Kevin Marder years back and deliberately switched to Finviz because they provide that criteria. I assume that other screeners also allow you to screen for this nowadays. Don’t confuse this metric with the quaterly forward EPS.

IPO’s often lack volume, fundamentals or both, therefore I just screen for stocks which went public within the last 3 months with Market Cap >190M and Price >7$. Here I also run one with quaterly sales > 50% in order to find the true unicorns. A trader can quickly lose sight of the real fundamentally strong stocks! Make it a habit to know the names with crazy high (>100%) quaterly sales growth!

Regarding the quiet and tight pullbacks you should screen for relative volume ranging from 0.05 up to 0.55. Anything below 0.05 is an anomaly in my opinion and can be neglected. One can also add the criteria that price must be close to the 20d MA in order to exclude extended or broken down names. Relative volume is updated in real time on Finviz.

When you want to find pocket pivots (or similar bullish action) end of day or intraday simply add the criteria that price must be up above the 20d MA and that relative volume must be >1.

In my opinion one should always screen wide here and ignore the exact definition of a pocket pivot! Let your chart eye decide if the price and volume action is strong and bullish relative to the prior action. No mechanical screener can replace a well trained chart eye.

Other screens you can run in order to stay ahead of the broad market:

  • Premarket up >2% and down >3%
  • Overnight Gap-ups >5%
  • Volume movers with relative volume >2
  • Large price moves with low relative volume <2 (Anomaly)
  • Small price moves with high relative volume >2 (Anomaly)
  • Big DOWN day >3% on high volume with price crossing down through 50d MA
  • Upcoming earnings
  • IPO screen (Price: >7 USD; Effective Market Cap: >190 USD)

Sometimes Finviz is a little slow with showing data for fresh IPOs so you have to check an IPO calender from time to time as well.

But you will be aware of hot upcoming IPOs automatically most of the time, even if you dodge the news.

Why I don’t watch quaterly EPS anymore

Quaterly earnings-per-sale (EPS) growth is one of the best metrics to gauge growth. It is widely followed and you can bet that almost all trend-following or fundamental traders screen for it.

However, it simply doesn’t cut it anymore when it comes to identifying high potential trade ideas in the current “money printing” era. It simply isn’t effective due to the fact that it is

A) old information

B) easily manipulated via buybacks

But even if you don’t screen for it I still recommend that you to set it up as a column in your screener so that you can sort any list by it if you want to …I rarely do.

As a matter of fact I have no clue which stocks are currently having the highest quaterly EPS growth figures and I couldn’t care less. In my honest opinion the quaterly EPS figures are now part of the beast that is the financial news media with the sole purpose to confuse traders on turning points to create liquidity for the accumulation and distribution campaigns of the insiders.

No one can deny that EPS growth figures lost a lot of their credibility over the years due to the fact that a company can easily manipulate it by buying back their own shares in the open market with the help of easy (read: artificial) central bank money.

It would certainly help if investors are given the right to vote on buybacks, but we are not there yet.

Anyway, in my opinion it is much better to look at estimated yearly forward growth because any name which pops on earnings due to a quarter over quarter EPS explosion hits your gap-up screen and can be monitored for a potential breakaway gap-up entry (the best entry for position trading!) anyway.

I also focus a lot more on quaterly sales since early 2018 and this allowed me to catch great stocks such as GH, SWAV, CVNA or PLAN in 2019. Finviz elite provide you with nice charts where you can see at a glance if sales growth can compensate a lack in EPS.

We here @ThweisSXFX made 135% within a couple weeks in GH in 2019 while all those who focus on quaterly EPS (GH: -83%) or those who screened too narrow completely missed this monster stock.

Which stocks to put on a watchlist

This is where the real magic happens.

You go through the charts of each screening table quickly and then decide which one to put on your watchlist. I barely go through all stocks when I screen a littler wider but rather sort them and then go through the first 100 to 300 or so.

Here is a video of how crazy fast this can be done with the tool I use every day. The speed and efficiency is day and night compared to the package I used early on. And this real time folks.

When screening for quiet and tight setups I either screen for it directly or sort the list for relative volume and then go over the charts to check if price action truly turned tight. I also focus on the overall appearance and neglect charts which are too choppy, sloppy and volatile.

When you have the paid version of finviz you have access to an awesome real time scanner. The beauty is that you can run a screen and then let it autoupdate every 10s. You can also set alerts so that you are informed once relative volume explodes or dries up in real time. This is huge when it comes to quickly identifying potential breakouts, pocket pivots and quiet and tight pullbacks intraday and into the close.

Running screens according to the guidelines above will often yield between 50 or 500 stocks. What I do is I order the output according to some parameters which are not necessarily part of the screening criteria. I am talking about things like Market Cap, Relative Volume, This Years EPS, Next Years EPS, Past 5 Years Sales growth, Quaterly Sales Growth and even Quaterly EPS Growth. Then I go through the charts intraday as shown in the video above. I do spontaneous screening like that all the time, not to find new ideas but just to get an idea about the general market.

The next step is to put the charts you like on your watchlist and export them into your charting terminal.

Mechanical screening no matter how sophisticated lacks the subjectivity of a trained chart eye and is unable to gauge relative changes. That is the reason why I always screen wide and then go over the charts and let my chart eye decide if the price & volume action is constructive or not. Doing this turns you into a stock picking wizard in no time (read: a couple years rather than a decade, sorry!)

In the end stock picking is an art and you will be at a disatvantage if you treat it like a science by letting a computer do the work for you!

Maintaining your watchlist

I maintain only one watchlist today and it typically contains between 20 and 60 names depending on how often I clean it up. It contains my fresh ideas, former leaders I monitor for entries, emotional stocks, various ETFs and stocks I use as market gauges. I remove speculative stocks which broke down for good and which are not short sales candidates quickly.

Here is a view of my efficient Tradingview setup:

It’s the place where I spent 90% of my trading time.

Take a look at how fast you can browse through your stocks with that tool and be aware that I display the monthly, weekly, daily and 15min charts together here. Can your tool do the same? If not consider switching to a faster and more modern one unless you like ripping out your hair intraday!

Sometimes when I see that a couple names are very close to flashing entries I put them on another intraday watchlist (trigger list).

The single watchlist approach is a very powerful technique despite its simplicity. Think of it as creating your own little stockmarket within the stockmarket by only including the stocks which either have the potential to make you money or which give you information regarding market direction. I couldn’t care less about all the other 7000+ names out there.

You find short sales opportunities by watching some of the former big leaders which broke down through their 50d MA on heavy volume for rallies into resistance.

Make it a habit to check out other stocks when you come across them but don’t allow them to enter your own little stockmarket.

I used to maintain an industry specific watchlist with 5 to 10 names each to see which industry branch was doing best in order to focus my buying. For me this turned out to be a waste of time.

You simply watch the names which hit your screens and have the potential to flash proper entry setups according to your rules. Just make sure to include the industry column in your screener so that you can see if a certain industry is doing exceptionally well.

Secondary indicators and the bigger picture

The action of individual stocks on your watchlist is always your primary indicator.

However, you can add a couple secondary indicators which supplement the clues you receive from the action of stocks.

Relative strength of major market indices and the most important industry groups. Can be easily created with StockCharts ( Major IndicesSectors ). A rally needs some leading sectors. Since 2015 it’s mostly tech. So when relative strength in the technology sector is absent you want to see other areas take over the lead.

General market breadth as measured by the advance/decline line. Watch this for divergences and not any absolute values. When the market makes a new high but the advance decline line doesn’t it is a mild bearish clue. However sometimes the market is simply fueld by a smaller group of stocks which would also result in a narrowing market breadth.

The old fashioned CBOE put/call ratio is still an effective fear gauge. A high relative spike often marks a short term capitulation low. This is not about some absolute values. (Intraday and end-of-day). I also include the UVXY in my evaluation. The UVXY oftentimes shows a multiday divergency with the underlying S&P500 close to turning points. It also tends to adhere to it’s own technicals when emotions run wild. This means the UVXY loves to pop into it’s own technical trendlines and this behaviour can be exploited by actually going long $UVXY (Only feasible when you have experience reading the UVXY chart!).

Important Note: The UVXY is a decaying instrument by nature and you want to check the current Contango before committing to a trade.

I also check the sentiment of retail traders via Ameritrades Investor Movement Index or short IMX. Over the years this gave me insight into the FOMO situation among mom-n-pop retail traders (Gen X and early Millenials) compared to the fresh wave of ‘Social Trading Bros’ (late Millenials and Zoomers).

Stock Twits was one of the first social trading platforms consisting mostly of Millenials and Zoomers. It helps to gauge speculative sentiment by checking if a stock is either flying under the radar or is crowded by emotional traders (read: suckers). The feed is one giant crowd indicator. It also provides neat little sentiment and post volume indicator. Do you want to know if your stock is too obvious or flying under the radar? StockTwits will provide you with a DEFINITE answer. I am always on the hunt for stocks not followed there, e.g., EXFY in november 2021!

The Big Picture. As a trader you should also create a bigger picture which you have in the back of your mind at all times. Doing this adds a light tendency which you won’t notice right away but which will have an impact on your trading. I personally believe that a multidecade secular bull run lies ahead so my big picture support this view.

In my opinion we left a 18 year long secular bear market and just entered a multi decade secular bull driven be the wide adoption of internet related technologies. The last 6 years also made clear that the old saying “never fight the FED” is still valid

(Update May 30th 2020: “never fight the FED” is still true as the FED started QE-Infinity and drove a historic v-shape recovery in the leading Nasdaq 100 following the SARS2 pandemic crash)

Be aware of economic events, exchange holidays and the seasonal time change via one of the many calenders out there (especially if you trade from outside the US). I once missed the bell by a full hour due to the seasonal time change. Not good!

Putting it all together

During the week: Run quiet & tight and IPO screens to find fresh swing setups after the close. Run gap-up screens before the bell in premarket and have a action plan ready. Be aware of the logical support and resistance levels of the broad market in case of a gap-up or gap-down open. Have a couple precise trade ideas in mind.

If you can’t watch the market intraday you should still try to find 20 mins an hour (not later) before the close in order to find quiet & tight entries. Use a realtime screener with autoupdate and alert notification in order to save time.

If you can watch the markets intraday spent the time wisely by running intraday screens and going over many charts in order to get an idea about the current state of the market.

Make it a habit to repeat your mantra or do some sort of exercise to tackle your biggest weakness before the open. In my case it was overtrading in various forms for many years.

Write down your thoughts and ideas in real time in a trading journal. Twitter is alright for this but make special offline notes when you engage with stocks.

On the weekend: Read some trading related articles or a book. After a couple of years you will be through with most books which focus on your style so you switch over to learn other styles ( get to know your “enemy”!)

Evaluate your portfolio and go over past and current trades. Check how you performed recently and compare that to what the market did. What you want to achieve is that the market validates your returns. What I mean is that whenever the market musters a real up or downtrend your portfolio should go up. When the market goes sideway your balance should go sideways or up as well.

Ideally the only time you experience drawdowns is during turning points in the market. Write this down! When you lose money on uptrends or downtrends your trading is still controlled by emotions (FOMO and overtrading), period!

Set up 30 min for running screens and going over charts. You will need some time depending on how fast your tools allow you to actually do that. Once the time is up you call it a day.

The key takeway here is that you only want to focus on the names which are obvious and which are in your face with regards to your rules. It doesn’t matter If you only find one name and it certainly isn’t a fail of your routine. The opposite is the case, as this is precious market feedback.

If you would simply continue screening and digging deeper you will come up with mediocre trading setups eventually and you will find ways to convince yourself why they are good ones. In the end you might simply trade them and the precious market feedback (read: That there are no good trading opportunities available right now) is lost.

I’ll end this with a neat trick you can apply right away and which can have a significant impact on your trading:

Find ways to never ever actually see your account balance. Only watch your portfolio in relative percentage terms. Create a calculator to get the amount of shares to buy without even taking a glimpse at your actual balance. The easiest way would be to connect Excel with your broker via an API. It is a strange sensation when you don’t really know the exact value of your portfolio and it allows you to dodge many psychological problems.

While I use Finviz and Tradingview for years now with great success, I want to make clear that you can use any tool you want. I actually tried many of them but if you are not able to go through all the charts within 30 min you will have a hard time screening effectively due to being mentally exhausted. Try to complete your screening within 30 min in the morning on an off day when you are fresh!

You stop looking left and right and you couldn’t care less if the grass is greener somewhere else. You trade your ideas when you see them and nothing else.

And always remember to be an artist when it comes to finding new trading ideas and to be a scientist when it comes to evaluating your portfolio.

Don’t mix this up, ever!


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The content of this article reflects our own opinion which stems from our own experience gathered trading real money in the stock market. It represents our style and it suits our personality and risk allowance and it may or may not suit yours. Please refer to our honest risk disclaimer for further information regarding the severe risks associated with active trading of the financial markets and in relation to financial products in general.

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