The 3rd section of the trading plan focuses on eliminating a mistake many beginners make: trying to trade too many stocks. It is important for students to choose 10-30 stocks and focus on only these stocks. The reason we recommend initially narrowing the focus is to eliminate the possibility of becoming overwhelmed. Many investors attempt to track hundreds, even thousands, of stocks. This is not necessary and can prove to be a huge mistake.

We recommend that new investors run a weekly screening to identify stocks that are suitable. For this trading plan, we have screened using the following conditions:

Market Cap: > $2 billion
Price: over $100
Average Volume: > 1 million

In order to stay focused, this portfolio will narrow the list of tradable stocks to those that posses a market cap of more than $2 billion with a share price of more than $100 per share and average volume of at least 1 million shares per day.

In this example, this screening led to the following list of tradable stocks:

Fill out section 10.3 in the Trading Plan Template.