In my
previous lesson, I outlined a way to help you quickly identify
the strongest and weakest sectors of the market. You will recall that stocks
usually move in groups. So, by trading stocks in the strongest and weakest
sectors of the market, you increase the probability of a successful trade. In
this lesson, I will go a step further and show you how you can utilize the tools
right here at TM to help find and analyze stocks for the next trading day.
Step 1. Go To The StockScanner
After you've identified the sectors you want to trade in, head over to the StockScanner.

Step 2. Go To The "News & Charts" Page
Staying within the Stocks section,
click on "News
& Charts" in the upper right-hand corner of your screen.
Click on "My Watch List."
Your default Watchlist will contain three symbols: Dow Jones Industrial
Average ($INDU | Quote | Chart | News | PowerRating), S&P 500 ($SPX | Quote | Chart | News | PowerRating), and Nasdaq Composite ($COMPX | Quote | Chart | News | PowerRating).
Here, you can begin to build your new Watchlists from the results of your
scans. Click on "New Watchlist." A pop-up box will appear,
prompting you to enter a name. Simply give it a name and click
"OK." For example, you can call this one "Software
Weak."
Input the symbols from the results
of your scan into your new Watchlist. Separate each symbol with a space.
Repeat if necessary, to create other Watchlists.
Then it's time to build your
technical analysis template. Under the "Tools" pulldown menu,
select "Customize Studies." I'm a big Dave Landry fan, so Bow
Ties are a must. In order to create your customized
template, add the technical studies that you want and adjust the parameters
to your desires. Repeat if necessary to create other study templates.

Step 3. Analysis
Everyone like to focus on trades that have a high probability of success. With that in mind, I like to look for two particular kinds of setups:
Pullbacks -- Pullbacks from highs and countertrend rallies from lows are the bread-and-butter swing trade setups. There is nothing fancy about them, they are logical, and they work. I mean, how else is a stock going to go higher except by taking out its prior high? Vice versa for shorts.

b. Triangles -- Triangles are another high-probability pattern. When prices go into consolidation, eventually one side will win. They can be subjective at times, but the results speak for themselves.

Step
4. Keeping Up With The Stats
During the market day, many key events are taking place. You can use the
"Market Hotspots" section to keep tabs on what's happening. Here are
some things you should keep your eyes on:
Volume -- Markets need fuel to move, and volume is that fuel. Visit the "Market Stats" page throughout the market day, especially the first half of trading, to identify big moving days.
52-week highs and lows -- Go to the "Top Stocks" section and under the Category pulldown menu, look at who is making new yearly highs and lows throughout the market day. In times of weak markets, look at who is making new 52-week highs. These are that stocks that are saying, "I don't care about the market, I'm going higher." And in times of strong markets, look at who is making 52-week new lows, as these are the dogs of the market and could be potential short setups.
Dollar Gainers and Losers -- These are the stocks that are the best and worst performers during the day. The Dollar Gainers and Losers lists give you a better representation of what's moving the markets. Many times, there is significant news behind the moves, and you can read up on what's happening by visiting the "News & Charts" section.
Summary
This lesson just provides an outline of how you can get more out of our site with tools such as the Stock Scanner, News & Charts and Market Hotspots to help you find and analyze stocks for the next trading day. Feel free to tailor it to your specific needs.
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