How
do you find the right stocks for daytrading?
Do you know where the action is? Maybe it's time for you to visit TradersWire’s
Intraday Momentum Data.
There are seven
categories of Intraday Momentum Data:
1. Proprietary
Momentum List -- Biggest Gainers
2. Biggest Breakouts Off New Highs
3. Biggest Gainers
4. Strongest RS 95-99
5. Proprietary Implosion List -- Biggest Losers
6. Biggest Breakdowns Off New Lows
7. Biggest Losers
Each category has up to five stock and is updated every hour.
Momentum
stocks give us one important ingredient for successful daytrading: They are
strongly uptrending or downtrending. It is extremely difficult to make a good
profit if a stock is locked in a range. Daytraders know their time
is limited, and they cannot waste time on non-trending stocks. Make sure your stock
is strongly uptrending/downtrending.
Because momentum
stocks attract day- and short-term traders, these stocks have excellent
liquidity. Have you ever found yourself stuck with unwanted shares because of
poor liquidity? Make sure that you pick stocks with a daily average volume of at
least 300,0000 shares.
With our Intraday Momentum Data you now you have a
list of stocks for daytrading. But which one do you trade? You have to scan
intraday charts quickly and spot the following patterns: breakouts/breakdowns
from triangles; breakouts/breakdowns from Slim Jims; breakouts/breakdowns from
support/resistance levels; and pullbacks from highs/lows. In TradersWire, we do this work for you. But if you're more of a do-it-yourselfer, you can learn from these
actual examples from TradersWire’s
Intraday Momentum Data. (You can also find valuable information on
chart patterns in the Baker/Ten
Electronic Trading Course.)
Proprietary
Momentum List -- Biggest Gainers
9/13/00 10:00 a.m.
At the time of the
report, Laboratory Corp. (LH) was trading at 125 5/8, and the stock
proceeded to form a triangle. LH broke out from the top of a triangle at 12:50
p.m. and climbed to 132. A breakout should preferably be accompanied by heavy
volume.
Biggest
Breakouts Off New Highs
9/13/00 10:00 a.m.
At the time of the
report, The Southern Company (SO) was trading at 34 1/4. After pulling back
from an 11:00 a.m. high, the stock formed a Slim Jim and broke out from this
pattern at 12:20 p.m. with increased volume. At 1:50 p.m., the stock hit its
intraday high of 35.
Biggest
Gainers
9/12/00 10:00 a.m.
At the time of the
report, Fuelcell Energy (FCEL) was trading at 85 1/16. It proceeded to
form a pullback-from-the-high pattern accompanied by decreasing volume and
began to rally at 10:30 a.m. This rally was accompanied by increasing volume,
and at 1:10 p.m., the stock peaked at 94 11/32.
Strongest
RS 95-99 Stocks
9/7/00 10:00 a.m.
At the time of the
report, Applied Micro Circuits (AMCC) was trading at 188 15/16. It
proceeded to form a Slim Jim pattern and broke out at 2:30 p.m. accompanied by
a volume surge. At 3:50 p.m., the stock hit its intraday high of 199 3/16, a
gain of almost 6 points.
Proprietary
Implosion List -- Biggest Losers
9/14/00 10:00 a.m.
At the time of the
report, 3M (MMM) was trading at 86 1/4. Accompanied
by heavy volume, at 11:00 a.m. the stock broke down below its support level.
At 2:30 p.m., the stock hit the intraday low of 84 3/16.
Biggest
Breakdowns Off New Lows
9/7/00 11:00 a.m.
At the time of the
report, Diamond Offshore Drilling (DO) was trading at 45 9/16. The stock proceeded to pull back from
the low and formed a Slim Jim. This setup failed to retest the intraday low
because a breakdown from the Slim Jim was not accompanied by a volume surge.
Biggest
Losers
9/14/00 10:00 a.m.
At the time of the
report, Maxwell Technologies (MXWL) was trading at 15 3/4. It proceeded to form a pullback-from-the-low pattern with decreasing volume and began to resume the downtrend at
11:00 a.m. This resumption of the downtrend was accompanied by increasing
volume, and the stock closed the day at 15 1/2.
Summary
Let’s
review what we have learned. TradersWire’s
Intraday Momentum Data can provide us with stocks with strong trends and
excellent liquidities. You have to scan intraday charts and look for stocks
with certain patterns: breakout/breakdown from triangles; breakout/breakdown
from slim jims; breakout/breakdown from support/resistance levels; and pullback
from highs/lows. To maximize your profit, pick stocks moving the same
direction as the market.
Finally, do not
assume daytrading is easy. We should not forget that only 10 to 15 percent of
the people who get into daytrading are successful, and many traders lose
everything they invest.
Do not forget to
place stop-loss orders. You want to keep your losses as small as possible. One
big loss can wipe out your entire account. Never approach the market with
preconceived ideas. You never know when your stocks are oversold or
overbought. Momentum stocks, in particular, always look overbought/oversold. Let
the market tell you when to sell or buy. Good luck, and happy trading.
