When I first started with that pocket full of money, I found myself casting a very wide net. (gambling)
I believe its far better to follow a hand full of stocks in a rising sector. If the stock you are following is not in a rising sector you must get further involved with that stocks funnymentals/price movements. You need to of followed the chosen stock for a long time to get a feel for it before entering.
You need to of been following the stock and charted the stock well before the buy. This meaning the price action is following your charting to a T, thus supporting your theories/charting skills.
I have a very good performance history spreadsheet linked to graphs out lining individual stocks. So it shows me what stocks are suited to my trading ways, instead of me finding more stocks on a day to day bases. This also goes through to my financial budgets so I know exactly what money is able to filter into my margin loan to off set any trades that may need to be covered.
Someone once posted on Hot copper, 'don't trade with scared money'
I am always losing paper money within my portfolio, but my spreadsheets tell me the story of actual returns. This helps offset bad feelings when I do get a trade wrong. I don't cut loses quickly I simply re chart and trade myself out of bad positions. This can sometimes take a long time.
