There is a good bit of a debate that occurs in my twitter stream between the ideals of trading from a group of stocks that you know intimately, versus creating a stock trade idea list from running scans – say, each night.
Although I appeal to the arguments made from both sides, I find for me personally that I am more comfortable with a Hybrid approach. So what does this mean? I believe that a trader must in fact have a “universe” of stocks that they know very very well. But in addition, I think one needs to run scans frequently looking for new stocks that offer good opportunities for trade ideas (an example would be my “within 3% of 52-week high” scan that I run).
One point I would like to make here is the distinction between knowing a stock intimately versus being emotionally attached to a stock. The latter is certainly not the mindset you should have under any circumstance. As I have posted in the past, I keep 4 watchlists of stocks that I trade often with each list sorted by % change from the close. This may or not work for you, but certainly experiment to find a system that works well with your trading methods.
So in summary, be sure you keep solid watch lists of stocks that you understand well – but always be sure to be on the lookout for new opportunities with the use of stock screeners. I use finviz.com and StockFetcher for my screening tasks.
Trade ’em well.