Strategies

Some strategies require us to scan for stocks that have some pre-market activity happening. Others require us to observe chart patterns materializing in the moment. We can use different scanners to identify each type of tradeable stock.

• The stocks that we ultimately trade should depend on our strategy.

Bottom reversal

If there is a quick sell off because of bad news, many people will notice and start monitoring the stock for what is called a Bottom Reversal. If stocks are trending down with the overall market, such as oil was some time ago, you cannot do a good reversal trade. Their value pops up by 10 cents, and you think it’s a reversal, but then they are sold off for another 50 cents. They’re selling off because they’re trending with both the overall market and their sector. Oil was a weak sector for a while in 2014 and 2015 and the majority of the oil and energy stocks were selling off. When a sector is weak, that is not a good time to make a reversal trade. That’s where you have to differentiate.

With this strategy, we cannot find stocks in the pre-market. This strategy gets executed in response to a chart pattern that it materializing in real-time.

Top reversal

With this strategy, we cannot find stocks in the pre-market

Momentum

you need to find low float (ie. low shares outstanding) stocks that are moving. You cannot find these stocks unless you are using a good scanner.

• For a scanner, tryTrade Ideas software

With this strategy, we cannot find stocks in the pre-market