My Current Stock Scans Explained

I’ve got two scans that I use to look for potential trade setups everyday. With over 6,000 stocks to choose from, it’s important to get that down to a more manageable number, especially if you’re a one man show like me.

My first scan really just gets me the most liquid stocks that tend to move a bit. So my criteria is:

  • Last >= 20 (to get that huge 6,000 number down. Large institutions also don’t look at penny stocks, so neither will I)
  • Beta >= 1 (I want the stock to move a bit)
  • Volume average >= 2000000 (I want only the most liquid stocks)
  • Open interest calls-puts >= 10,000 (I usually trade options, so I want the tightest bid-ask spreads)
Scan 1
Scan 1

I use Tradestation for this (pictured above) but you could just as easily use a site like Finviz. This usually gets me down to a list of about 220 stocks. Once I have those, they form the input into my second scan, which is based off of my trading chart – the 60 minute chart.

My second scan, which runs hourly throughout the day, looks for stocks from the list above that have made an extended range candle on the 60 minute chart. In other words, they have just made a candle with a range that is 2.3 times larger than the average of the previous 23 candles. This tells me that there is some big player(s) involved, and helps me find where the action is at. Here is an example in $CAM where it made a big ERC out of the $58.27 level, so I will be looking to buy when it retests that zone.

CAM - 60 Minute - 24 November 2014
CAM – 60 Minute – 24 November 2014

 

To enhance your odds even more, take a look at the finviz groups page (I look at the three month performance), and cross check a stock you want to trade based on the above scans to see if it is in one of the top 2 or 3 sectors. Getting help from the market and sector on any trade is a huge odds enhancer.

I hope this helps. I know it can be a daunting task sifting through thousands of charts looking for a viable chart to trade.

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