If you’ve ever tuned into my Premarket Prep, you’ve probably heard me talk about this pattern almost every day.
And if you’re not watching yet, you’re missing out. Premarket Prep is part of my Daily Income Trader System.
You can check out DIT right here.
Yesterday was no different. As usual, I spotted five or six of these setups.
Statistically, four of five of them don’t hit…
But the one or two that do go absolutely insane!
And that’s exactly what happened today.
Why do I love this pattern?
It’s reliable and I see it all the time…
This setup isn’t some wild goose chase where you’re scrambling in premarket, chasing every shiny stock and hoping it sticks.
It’s a pattern you can anticipate, identify, and plan for well in advance.
That’s why I want you to learn it and be ready for it too!
Table of Contents
What’s the Pattern?
I call it the Morning Fader pattern. You’re missing a golden opportunity if you haven’t added it to your playbook yet.
Here’s what happens:
A low-float stock gaps up premarket, only to fade into the open.
Yes, that doesn’t sound good does it?
The thing is, the action happens after the market opens…
When it works, Oracle helps us pinpoint the entry signal ahead of time.
And once the stock hits that entry price, boom! It’s off to the races, delivering amazing intraday gains.
Even better, because of Oracle, you can approach these trades with laser precision. The setup boasts a strong risk-to-reward ratio, which is exactly what we want as traders.
If you’re not familiar with our proprietary algorithm, Oracle, you don’t know what you’re missing. I use this tool every single day and I couldn’t trade without it.
Tune into one of our free StocksToTrade webinars to see it in action.
Here’s What Happened Yesterday Morning:
First, I saw Pain Reform Ltd. (NASDAQ: PRFX).
At the time, it was definitely in the midst of a fade.
But after the open, the story changed…
We had an Oracle green entry signal at $5.47 per share and the stock skyrocketed to a high of $16.33, for a gain of 204%*!
PRFX Intraday, 1-Minute Candles Chart; SteadyTrade
Another one I saw during premarket was XChange Tec.Inc. ADR (NASDAQ: XHG).
Again, this one was fading fast…
And then the market opened, it hit the Oracle entry price of $1.68 per share, and then spiked to a high of $3.20. That was a gain of 90.48% within less than an hour!
XHG Intraday, 1-Minute Candles Chart; SteadyTrade
Why I Love the Morning Fader
Besides the potential for great returns, this pattern is straightforward. There’s no second-guessing or overcomplicating things.
Here’s the your simple trade plan:
- Spot the premarket fade.
- Wait for the Oracle signal.
- If the stock hits the signal, make the trade.
- If it doesn’t, move on.
- If it drops to the morning low after your entry, cut your losses and live to trade another day.
Easy Peasy!
If you’re looking for a way to find stocks that are fading premarket, you need a robust trading platform that provides real-time data, charting, and more.
My top pick is StocksToTrade and it’s the one I use every day.
It has everything a trader like me looks for in a platform…
And right now, you can get two weeks of both the STT platform and our news service, Breaking News Chat, for $17.
Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17!
My Final Thoughts…
The Morning Fader is one of the best patterns in today’s market, and it keeps you from chasing unreliable setups during premarket.
As with any pattern, it doesn’t work 100% of the time. Like I said earlier, out of five Morning Fader setups, only one or two will work out in our favor…
But when they do, get ready!
For additional trading mentorship, stock ideas, and more, subscribe to my StocksToTrade Advisory service.
Every STT Advisory member gets a monthly newsletter with a list of my top picks, three weekly videos with my watchlists, bonus reports, and more.
Sign up for StocksToTrade Advisory right here!
Have a great weekend, everyone. See you back here on Monday.
Tim Bohen
Lead Trainer, StocksToTrade