Scanning
I get the question asked all the time on how I find momentum
stocks. I feel people’s pain because I
remember when I first started to trade I could only find one good idea here and
there. Remember, I am mostly a momentum
trader. But, I do have other scanners I use and strategies. For this post, I am
trying to help you find momentum stocks.
Let’s think about this. What is a
momentum stock? A momentum stock has traffic
and/or catalyst.
Myself, I am not too picky on the price as long as it’s above a dollar. First, we want a stock that is up for the day. This is because every momentum stock will be up. Second, we need abnormal volume, so we have to have a relative volume above one. A relative volume compares current volume to normal volume for the same time of day. I like to have mine around 1.5 sometimes I even put at one, so I have more choice if I cannot find anything. This way I have more options to choice from. We want to stay away from stocks that have little liquidity. Therefore, we need 300k or above on average volume for the day. I usually like more volume, but I put at 300k, so I have more options to find them. Myself, I like a scanning software that I can see the charts because I am more visual. That is one way of finding momentum stocks. Another way I like to finding them is Extreme volume breakouts. Thus, I program the setting on Trade Ideas for that. I set the change from the Close min 1 to max 3000. What that means is the stock is up 1% to 3000%. On the minute volume, I like the volume in the last minute at least 1000% of normal. On the 5 minute volume, I like 2000% of normal. When it comes to the float, I like at least 300k or above. Remember that the smaller the float the fast it can pop with extreme volume or cut against you. Be careful on these low float because they are usually moving up for the wrong reason. What I mean by that is, there could be some chatroom pumping it or someone with a bundle of cash moving the stock. There are hedge fund guys do this all the time. They have the funds to do this. Or, a chatroom will get their followers to pump and dump the stock. There are tons of games with these low floats, so be careful. Well, that is a brief way to finding momentum stocks. Below, I will post some great sites to scan for free and pay. Have a good week of trading everyone and let’s kick some bud this week.
Myself, I am not too picky on the price as long as it’s above a dollar. First, we want a stock that is up for the day. This is because every momentum stock will be up. Second, we need abnormal volume, so we have to have a relative volume above one. A relative volume compares current volume to normal volume for the same time of day. I like to have mine around 1.5 sometimes I even put at one, so I have more choice if I cannot find anything. This way I have more options to choice from. We want to stay away from stocks that have little liquidity. Therefore, we need 300k or above on average volume for the day. I usually like more volume, but I put at 300k, so I have more options to find them. Myself, I like a scanning software that I can see the charts because I am more visual. That is one way of finding momentum stocks. Another way I like to finding them is Extreme volume breakouts. Thus, I program the setting on Trade Ideas for that. I set the change from the Close min 1 to max 3000. What that means is the stock is up 1% to 3000%. On the minute volume, I like the volume in the last minute at least 1000% of normal. On the 5 minute volume, I like 2000% of normal. When it comes to the float, I like at least 300k or above. Remember that the smaller the float the fast it can pop with extreme volume or cut against you. Be careful on these low float because they are usually moving up for the wrong reason. What I mean by that is, there could be some chatroom pumping it or someone with a bundle of cash moving the stock. There are hedge fund guys do this all the time. They have the funds to do this. Or, a chatroom will get their followers to pump and dump the stock. There are tons of games with these low floats, so be careful. Well, that is a brief way to finding momentum stocks. Below, I will post some great sites to scan for free and pay. Have a good week of trading everyone and let’s kick some bud this week.
Site:
Stock market Pre-market: http://thestockmarketwatch.com/markets/pre-market/today.aspx
StockChart: http://stockcharts.com/def/servlet/SC.scan
Yahoo Finance: http://finance.yahoo.com/stock-center/
Market Watch: http://www.marketwatch.com/tools/stockresearch/screener/
Chart Mill: http://www.chartmill.com/stockscreener.php
Rating Stocks: http://ratingstocks.com/screener
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