Guide to Day Trading Strategies

H O W T O D A Y T R A D E
15
Chart of a stock that has just been bought out.
When we are reviewing the news for a stock, it is important to think about the quality of the source. 
News released directly from the company, a competing company, majority shareholders, top tier 
analyst 
À
rms or government agencies will typically be the strongest. This will include earnings 
results, sales contracts, buyout offers, stock buyback programs, FDA approvals, government 
investigations, patent approvals, etc. News released from unknown analysts or uncon
À
rmed 
sources should always be considered suspect.

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R O S S C A M E R O N
16
Chart of a Former Runner, a stock known to make huge moves when it has news.
Former Runners
It is important to be familiar with former runners. A former runner is a stock that has made huge 
intraday moves in the past, or has made parabolic moves on the daily chart. These are stocks that 
made moves in excess of 100% over a few days. If we notice a former runner reporting news, it 
is worth keeping a close eye on it. We already know the stock has the potential for home run 
type breakouts, so it is possible we could see that type of move again under the right conditions. 
Former runners will typically have all the characteristics of a good stock. They will have that 
perfect combination of a low 
Á
oat and strong breaking news.

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H O W T O D A Y T R A D E
17
Chart of Low Float Stock moving 10,000% in 3 weeks.
Low Float Stocks
All stocks have a 
Á
oat. The 
Á
oat is the number of outstanding shares available to trade on the 
open market, not including shares held by insiders and the company. The 
Á
oat is the supply. 
When a stock makes its initial public offering (IPO), they release a set number of shares into the 
market. This becomes the 
Á
oat. At any time, a company can begin a stock buyback program to 
repurchase the shares on the open market. The result of a buyback program will be a decrease 

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