The Watchlist Principle

Much of your trading activity will revolve around the construction, maintenance and study of a solid watch list. 

A watch list is simply a group of stock charts that you have previously screened and saved for continuing use. 

This watch list will be contained electronically either within OnlineOption.com (resources, charting) or on your own charting software (MetaStock or other).

After completing the Trade Candidate Filter process, which you can learn in the OnlineOption Trader Manual, it is necessary to perform one final step before placing a stock chart on your watch list. 

The type of stock that will be of most value to you has a number of specific characteristics. We are looking for high quality companies that, among other things, produce price strength in the top 10% of all companies. 

In addition, the stock charts of these companies must show patterns of price and volume movement that are displayed in such a way as to be usable. To make this determination simply pull up a chart of the company you are considering and ask yourself two questions:

1. Does this chart make sense to me?

2. Do I see ways to make money using this chart?

If the answers to these two questions are yes, then save the chart to your watch list. 

At this point in your study, attempting to formulate answers to the above questions may be completely out of the range of possibility for you.

After all, you must have some points of reference or experience before any chart can make sense.  

You'll want to read the OnlineOption Trader Manual for more in-depth information on understanding charts.