Every week, I run a scan looking for potential setups that can deliver fast, consistent profits.
But here’s the thing…
I don’t just grab the first stock that pops up with a clean chart. My goal is to find stable, predictable trades that can support a carefully structured butterfly spread.
That means I filter ruthlessly.
If you’re wondering how I narrow down the list, this is exactly what I look for — and what I avoid — before even thinking about execution.
Stay Away From News-Driven Names
The biggest red flag? Tech stocks. It’s not that I hate tech — it’s that I don’t like surprises. And tech is loaded with them.
Take Advanced Micro Devices (AMD), Intel (INTC) or Nvidia (NVDA). Even if the trade looks clean on the chart, these stocks can get swept away by headlines that have nothing to do with their own earnings or fundamentals.
When one big-name chipmaker reports or guides lower, the whole sector can ripple. That adds volatility I don’t want — especially when I’m building a setup based on range-bound movement.
Same goes for mega caps like Microsoft (MSFT) or Apple (AAPL). Too much institutional attention, too many headlines, and too much exposure to the S&P 500’s (SPY) daily mood swings.
So when I see that kind of correlation risk or headline exposure, I skip it — no matter how “perfect” the pattern might look.
What Makes the Cut
I’m looking for stocks that are mostly trading sideways — ideally within a wide range. That range has to be backed up by expanded average true ranges, or ATRs. If the ATR doesn’t confirm the volatility I see on the chart, the setup isn’t worth the risk.
I also want separation from the S&P 500. If a stock’s movement mirrors the index, I don’t need to trade it — I’ll just trade SPY directly. Instead, I want something with its own rhythm.
Sectors like Industrials (XLI), Energy (XLE), and Consumer Staples (XLP) often provide better candidates because they’re not as correlated to every twist and turn in the broader market. Stocks like General Motors (GM), Triple M (MMM), or Danaher (DHR) have been on the list recently — not because they’re exciting, but because they’re boring in exactly the right way.
And that’s the secret. I don’t want drama. I want slow, sideways churn that lets me structure a trade with clearly defined risk and strong profit potential. If the chart isn’t clean and the options chain isn’t liquid, I move on.
There’s always another name — and usually a better one.
Kane Shieh
Kane Shieh Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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