Keeping a Do Not Trade List
Its beneficial to have a do not trade list as a trader. This is simply a list of stocks to watch out for. These stocks you want to do your best to stay away from and not to trade with.
When I was first trading, I would back test and paper trade new systems trying to get my exact trading rules. One thing I would notice is that my systems would work extremely well on some stocks but would work terrible on others.
This is true regardless of how you trade. It makes sense, remember, people move stocks. Every person has a different personality, and most traders have a few stocks that they prefer to trade. Therefore every stock behaves differently.
though all stocks follow the basic rules of technical and fundamental analysis the way they follow those rules vary from stock to stock. In short just like people every stock has a different personality.
Just like you do not get along with some people you will not get along with some stocks. They may not behave in the way that you may expect them to. Of course that can be very frustrating.
That is why keeping a do not trade list can be very important. If you find that a certain stock is not giving you good results while others are you may want to stop trading that stock. But remember you cant tell whether a stock doesnt like your trading method based on one trade or even two trades. You can only tell after a series of trades.
Keeping a list of stocks that do not agree with you can save you thousands of dollars in trading losses, so it is worth doing.
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