Guide to Day Trading Strategies

Image of Momentum Scanner by Trade-Ideas.

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Momentum Scanner Settings.
Momentum Scanners
I use this same process for writing a scanner to look for momentum stocks. The important 
À
lter 
for momentum stocks is the high relative volume and the 15 minute volume surge. By turning 
up these minimum 
À
lters, I can see the most active stocks in the market each day. All scanners 
produce some false alerts, which is why we cannot trade solely based on the alerts of a stock 
scanner. I have momentum scanners looking for stocks experiencing 52 week highs, daily chart 
breakouts, massive intraday volume and extreme rate of change. Anytime I see a stock show up 
on one of my momentum scanners, I can immediately begin to review the chart for windows 
and triggers and look to apply a Momentum Trading Strategy setup.
Some of the best momentum scanner alerts will be stocks that were not even on our watch 
list, which was based on pre-market volume. Breaking news released in the middle of the day 
can cause a stock to suddenly come into play. When this is the case, we have to make a quick 
analysis of the catalyst and the level of risk involved in the potential trade. Taking a spontaneous 
midday trade can result in unexpected losses if we do not 
À
rst consider the risk. Anytime a stock 
begins to spike or move quickly on breaking news, I like to watch it and let the dust settle before 

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taking any trades. Sometimes prices will spike up and then come right back down in a matter of 
minutes. If the news is legitimate, and the stock continues to trade on heavy volume, it is worth 
adding to the watch list. Remember that it is important to con
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rm the source of any breaking 
news story before entering a trade. We can apply the Momentum Trading Strategy and possibly 
the Reversal Trading Strategies to breaking news setups. Typically, stocks that spike up in the 
middle of the day on news, will be worth watching for the rest of the day because they will trade 
on high relative volume.