So, so much of successful trading is, being prepared every single day. There are four undeniable things that you need to do every pre-market for the trading day. And that’s what I’m gonna talk about today.
Today, we’re gonna talk about the four undeniable things you should look for every single pre-market and the four things you have to do every single day.
Table of Contents
Do Some Screening Package
Number one. I mean, obviously, I’m a little biased. Full disclosure, I work for StocksToTrade, but I think and I truly believe this, that StocksToTrade as some of the best scanners out there, especially the pre-market scanners.
And the nice thing is, we’ve got, 50 or 60, pre-built scanners that were designed specifically by Tim Sykes. Tim Sykes created StocksToTrade, he created these screeners to find his type of stocks.
So, first thing I want you to do is, do some screening package, okay. Use some criteria, because you got to get your list down from thousands to 50, to 20 to 10, to five. Or ideally one.
So, run those pre-built scanners every day. Most of them are focused on volatility, volume, news, earnings. All of these things that Tim Sykes looks for every day. So every morning, run those scans, build your watch list and be prepared.
Read of the Market Sentiment
Second thing I want you to do every pre-market is get a read of the market sentiment, okay? And we do this a lot of different ways. But you know, typically, what Tim does, what I do is, we’re following the S&P 500.
So, you can follow that with the overall index or with the SPY, ETF, that tracks the S&P 500. But, you know, Tim Sykes doesn’t trade the S&P 500. I don’t trade the S&P 500, but what that’s telling you is what the overall market is intending to do on the day.
So, if the Dow Jones, if the S&P, if the NASDAQ QQQ are all green on the day, they’re gaping up on the morning, The idea is, we’re gonna have a bullish day.
Remember, three out of four stocks follow the overall market. So SPY, the Dow Jones, if they’re up in the morning. Odds are, if you’re looking at a stock, that’s breaking out, that has news, it’s gonna trend with the overall market.
Now vice versa, you know, if the markets gaping down, say we’ve got some bad macro-economic news, there’s some trade war news. Maybe there was some geopolitical event that happened and the markets gaping down.
Maybe you wanna back off a little bit and say, “Okay, do I really wanna get aggressive today?” “When I know three out of four stocks, follow the market.” That’s the biggest thing I want you to do next is just kinda get a mindset for really how aggressive you wanna be.
If you’re under the PDT or even if you’re not. You know, if you’re a part time trader, you probably can’t trade every single day. So if you’re a long biased trader, you show up markets down big.
Maybe that’s a day you go back to the day job, maybe that’s a day you study, you know, watch Tim’s video lessons, review his watch list. There’s thousands of YouTube videos, thousands of video lessons. Maybe that’s the day you study versus trade.
Simple Breakouts
Third thing I want you to look at is, you know, we’re recording this video in 2020. And the market is just been raging for years. Rocking, rocking new highs. I mean, if we’re not new highs every couple days, it’s only a couple days and then we’re back at new highs.
So, one of the biggest criteria I want to look for is looking for breakouts, simple breakouts. Stocks that are hitting Multi-week, Multi-month, Multi-year highs.
Because that gives you an idea of, you know, of a stock. You know, simple fact is, stocks that breakout tend to continue to break out, especially during incredible bull markets. You know, I don’t, you know, don’t be trying to spot undiscovered stocks.
You know, don’t be trying to spot stocks that are stuck in range consolidation, that have been tracking sideways on low value. Never especially in low price stocks. Never try and you know, buy a long term down trending stock.
I mean, if it’s been down trending for six months. Don’t try and find these under undiscovered stocks. Look for strong stocks, breaking out on volume, breaking out with the SPY.
That heightens your potential for a multi-hour, multi-day, even multi-week trade, that high– You know, heightens your potential for success.
Former Runners
Last and fourth thing I want you to look for is look for former runners. Okay? Remember, I talk about this a lot. You’ve probably heard me say it, but, “The past doesn’t repeat. But it rhymes.”
I believe that is a Mark Twain quote. So it goes back, you know, 150 years. But nevertheless, I think is so true in the stock market. If you’re looking at that one year, three year five year chart, and the stock is never ran in the past, odds are, it’s not gonna run today.
So if you run your scans, and you see this stat gaping up, but it’s never made big moves in the past, it’s probably not going to make big moves today.
So look for former runners, you wanna see a stock that a year ago went from two to ten. And now today, if it’s gaping, up to two, doesn’t mean it’s going to ten again. But day traders, lot of traders, they have great memories.
I think, you know, on a side note, a skill you should work on is immersing yourself in the market because you know if, the more you remember, the more you notice.
That stuff just repeats and repeats and repeats. So if you’ve seen this ticker run six months before, it clicks, and it clicks with everybody else, So everybody piles in the stock, because everyone says, “Oh, remember that time “it went from two to ten?”
So that gives you a good potential for a trade.
Multi-Day Runners
And then the last thing I want you to do, focus on multi-day runners.
I see a lot of people coming on markets, you know, they they’re not looking at the multi, you know, the longer term chart. They just see a big gainer.
Maybe it’s got some iffy news and they get all fired up. And very frequently in this niche, simple realities. We get a lot of these what I call one and done charts, where they spike and fail the same day.
Doesn’t mean you can’t trade them, but you gotta be quick and you got to be dialed in. I mean, if you’re trading from work, and you’re trying to trade one of these one and done charts, you know, the boss walks in your office and all of a sudden your stock drops 20% when he walks back out, it’s tough to trade those.
So steer clear of the one and done charts and look for those multi-day moves. The way I do that is, with a rolling watch list methodology. Lota words, but what I do is, I have a Monday, Tuesday, Wednesday, Thursday Friday watch list.
First thing I do every morning is I look at the previous days watch list and see what stocks are still hanging around. Which ones are at their highs, which ones are at the breakouts.
If a stock from yesterday was a one and done spiked early, dropped late, goes off my list. So and then I roll back all five days and bring the ones that are still trending, still at their highs, still at the breakout to today’s watch list.
That helps me find confirmation of multi-day moves. And these are the stats especially if you’re looking for that Friday squeezer. You know, again, check out a lot of Tim’s articles.
He talks about the Friday squeeze, non stop. And it’s because it’s a great setup. If you’re Using this rolling watch list methodology and some stock spiked up on Monday, then kinda just did nothing on Tuesday, Wednesday, Thursday but home near its highs.
Those are the ones that tend to squeeze, blow out the short sellers on Friday and our great trading opportunities.
So, be sure to check out these four things to really and you gotta do them every pre-market.
A lot of this is repeating but if the more you repeat it, the quicker you get at it, the better you get at it.
