How Do I Pick a Stock Watch List for Trading?

Choosing from thousands of stocks requires setting limits.

Choosing from thousands of stocks requires setting limits.

When you want to find a set of stocks to watch, you don't have to wait to hear a tip from your uncle or overhear a conversation on a bus. Today's traders have tools to help them find lists of stocks that fit their goals and trading styles. You can create a list to follow by deciding what stock and company behaviors are important to you and using some simple methods to screen for them.

Choose a stock screener. Online stock screeners can search through all available stocks to find ones that fit your search criteria. Trading accounts come with a stock screener, but you can also find free ones online. Look at several of them and try them out to see which ones you find easiest to use.

Determine your criteria. A stock screener will let you look for stocks that have high profit margins, low debt, low price-to-earnings ratios and high dividends, to give a few examples. You can also search for stocks that recently hit 52-week highs or 52-week lows, or stocks that have risen or fallen by a percentage you select. To effectively develop a watch list, use one set of criteria for the whole list. For example, if you are looking for bargain-priced stocks, you might look for those that have hit 52-week lows. You will create a confusing list if you also add stocks that have hit 52-week highs.

Narrow your list. If your search yields 50 stocks or more, your search criteria are too broad. Add criteria until you narrow your choices to a dozen stocks. You may find it difficult to track any more than that, because stocks behave in widely different ways. For example, if you watch a set of stocks to see which ones respond to a new government regulation, you may see many of them move in opposite directions. With a dozen or so stocks, you can sort out that movement. However, with two dozen at once, you might not see any patterns in the price movements.

Enter the stock symbols of the stocks you choose in a watch list. You can find free watch lists online at sites such as Yahoo Finance and Google Finance. The site will show you the change in each stock's price every day. Based on the changes in price, you can decide which stocks to purchase. For example, if you are waiting for a stock to rebound from a low, your watch list will show you any stocks that experience dramatic rises in price.


  • If you are interested in two different types of stocks, create a separate watch list for each type. For example, you could create a list for undervalued stocks and another for stocks that have shown steady growth.

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