Today's Quote: “Opportunity may knock only once, but temptation leans on the doorbell." Anon.

We hope you have enjoyed the recent series of lessons that discussed how professional traders act that appeared in this section of the letter. Today will be introducing a new topic that should last for several days as well. It is the topic of what resources, or watch lists, traders use during the day for finding intraday plays. A couple of months ago we ran a couple of basic article on how to create universes and scan the daily chart. This brought a lot of positive comments, as well as questions about creating other watchlists. We will begin reviewing the ‘complete’ list today. Note, that even the intraday trader benefits from a watchlist from the daily charts, as these can make the best ‘universe’ to look at during the day. Therefore, we will also include a review of those watchlists.

We will be discussing a different source of information every day. There are five in all and we like to refer to these as the five “weapons" that we use throughout the trading day. The first source of information is a watch list that is created from the daily, weekly, and sometimes hourly charts and is created sometime after close of the prior trading day. This play source is good for both longer-term trading, and also for finding stocks that are moving on an intraday basis. The second source of information is the "gap" list that is created every morning once pre-market activity begins. Gaps can be a very fertile source of plays for the intraday trader.

Next is the use of a "favorites" list which is a fixed list of typically higher volumes stocks that the trader knows very well. The fourth source of information comes from an analysis of the sectors and a breakdown of the sectors that are leading the way up and leading the way down on that particular day. And finally the last source of information comes from computerized scanning techniques. The trader inputs information he wants to see, and a scan appears before him with the desired results. The source of plays for VCM traders in this category is the VCM Scanner Pro™.