How to narrow your focus

If you want to make money in the market then you have to narrow your focus to a specific style and setup .

For a new trader or struggling trader this can be a big challenge. Because you may not know what to focus on. Every style and idea looks attractive at that stage. As you gain more experience it becomes easier to narrow your focus. 

For beginners the best route to narrow your focus is to copy some of the well known approaches that have worked. By basing your approach around a ready template you are likely to  reduce your learning curve significantly.

For experienced traders periodically re looking your approach can help narrow the focus. often as you gain experience you can end up trading many different setups as you get exposed to many successful traders and their approach. This can be good and also sometime bad. It can lead to style drift.

While there are many ways to narrow your focus the simplest approach is to first narrow your approach to specific types of stocks:

• growth stocks
• momentum stocks
• value stocks
• turnaround stock
• high priced stocks
• low priced stocks
• highly liquid stock
• low liquidity stocks
• low float stocks
• ETF

A narrowing decision then helps you further narrow your setup to specific pattern or anomaly on those stocks.

For example growth stocks tend to breakout on big earnings surprise . You can decide to build your approach around that and focus only on stocks with very big first or second earnings surprise. The Episodic Pivots approach I have detailed focuses on that.

 Successful speculation is difficult art but to develop it first step should be to narrow your focus.