Many people keep asking me what stocks I use to trade and how do I choose them.

I try to explain to them that my stock selection is simple. I have a trade plan and part of the plan is also what stocks I want trade.

Over the years I learned not to focus on all 50,000 stocks or so but have a certain criteria the stocks must meet in order for me to trade them. I do not trade expectations, stories behind the stocks, predictions, or wishful thinking.

Many times in the past I tried to create a story. I tried to find a reason for trading a certain stock. I tried to interpret fundamental data to back up my story creation and then tried to find a technical data by chart reading to further strengthen my theory of why I should trade a certain stock.

And guess what. I was almost always wrong. But I so convinced myself by creating a story and then finding data further supporting my conviction that I actually deceived myself into a trade I knew nothing about but my own chimera. And as soon as I opened a trade, it went in the right opposite direction. I lost money. And I was totally disappointed.

Does this sound familiar to you?

If yes, then why you keep doing it? Do not do it!
 

When people ask me why I trade a certain stock I usually have no answer to them besides that they meet my criteria.

First, I started with a prime goal of trading options against dividend stocks.

Why dividend stocks?

Because if I get assigned to the stock, I will be OK to buy such stock and hold it as long as I will be able to sell it again and during that time I will be collecting dividends. Thus it is a win-win situation. Right?

However, not all of 50 or more dividend stocks in my dividend growth stock watch list are optionable and not all of them have options meeting my criteria to trade them.

So I narrowed my 50 stocks watch list to about 19 stocks which are good to trade them. Of course, this doesn’t mean that I trade them all. I trade only a hand full of them. I regularly scan them to make sure they meet my rules. I take out those which do not and add those which do.

And after those stocks are identified then the whole trading is just pure mechanical trading. It’s like one, two, three… trading. And I trade those stocks again and again as long as they keep to meet my rules.

 
And here is my watch list for June 2017:
 

Symbol

ABT

ADM

BAC

BMY

COP

EBAY

ETE

M

MDLZ

MGA

MOS

MU

NUE

OIH

STX

TECK

WFM

X

YHOO