To get you ready for today’s trading action, I’m going to show you how to spot the best possible trades…
To find them…it starts with a scan.
You might hear a lot about scans and screeners, but a lot of traders have no idea how to set up a scan because they don’t know what they’re actually looking for…
I like to keep my scans simple. I also like to look for simple patterns.
Because too much information can create analysis paralysis. That’s something you want to avoid. And using screeners and scans is the best way to get all of the daily runners down to, ideally, one great trade.
But what might be a number one watch for me might not be your number one. So this is a great way to find the best trades that work for YOU. Read on…
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How to Build a Stock Scan
A penny stock screener is a tool that helps traders filter stocks based on specific criteria.
That’ll help you narrow your focus and quickly find the stocks that best fit your account size and trading plan.
Running a scan doesn’t eliminate the need for research. But it can be a big help when you create a watchlist.
StocksToTrade’s platform comes loaded with 40+ built-in scanners. And of course, you can always customize your own…
But here are some basics I think all of your scans should include:
- Volume
- Price
- Percent gains
Other than those three top criteria, you add whichever you like — sector, market cap, trading range, indicators, and more.
But try to keep your scans simple — you don’t want to get overwhelmed with search results
Watch this video to see how you can find big percent gainers with scans.
My Top Three Favorite Scans
Now, once you have scan settings you like, you can save them in your platform and run them every morning and afternoon.
That gives you the best chance to find any stocks that are running at the best times of the day to trade. Personally, I have three scans I like to use.
Below are the criteria for each, so you can put them in your own platform and use them too.
52-Week Breakout Scan
These days you might not see a ton of tickers on my 52-week breakout scan — except for maybe oil and gas stocks.
But if you’re a part-time trader or under the PDT, this is a great scan to run at the end of the day to look for stocks with strength that might be worth swinging overnight.
The criteria for this scan are:
- Previous day’s volume of over 1 million.
- Stock price over $1.
- Within 2% of the 52-week high.
Using a range of 2% from 52-week highs lets me find stocks with the potential to break out, but also stocks that have already broken out.
If they traded high volume on the first breakout day, they’ll show up on my scan because of my previous day’s volume criteria.
One of my favorite intraday scans is the…
VWAP-Hold High-of-Day Break Scan
It’s a lot of words. But again it’s a simple scan. Here are the criteria:
- Stocks between $1-$20.
- Percent gain over 10%.
- Daily volume over 1 million.
- Stock within 2% of VWAP.
I limit the price of stocks on this scan to $20 because I want to see the best daily momentum stocks. I don’t want to see a lot of high-priced slow grinders on my search results.
This is another great afternoon scan because it will show you stocks that are already spiking.
Since VWAP is a lagging indicator, if a stock spikes and holds up, it will be near VWAP and show up on my scan. But if it spikes and fails, it won’t be near VWAP and it won’t show up on my scan.
I use this scan every day to help me spot stocks that are the ‘lone survivors’ in the afternoon.
Next is my…
Volume Boost Scan
I use my volume boost scan to find stocks with big price movements and big volume.
Here are the criteria:
- 10% or more above the 60-day average volume. (This gives me a snapshot of the stock’s volume over the last few months.)
- A price range from $1 to $12. (I use a lower price than my VWAP scan so I see the lowest-priced stocks trading big volume.)
- Volume over $1 million.
- Percent gain is 5% or more.
This scan is great to see the biggest movers of the day.
It shows you where the masses are. And it can help you spot hot sectors if multiple stock results are within the same sector.
Now, with the help of my scans, I hope you’re ready for all of today’s trading action!
Have a great day my friends. I’ll see you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade