Different Settings For Scanners, and a Look At VWAP and Overhead Supply

There have been several posts about working with scanners. Type into the search box for those. They are extremely helpful, and not just for daytrading purposes. Many of my position trading symbols come directly off of them showing up on a scanner first. There are thousands of symbols which I have gotten/get directly off scanners, most daytraders, but others also, examples – IMMU, ZGNX, LOXO, SQ, GRUB, MRTX, I, TNDM, all these discussed over and over and over, so many huge, multi-month 3-5x winning stocks came right off of the scanner originally. Now as far as the very short-term trading stocks, the longer-term potential holds, and premarket scanners. If you are working hard at this, you will get better and better at filtering out what is pure daytrade vs ones which have much more potential. Accumulation, to me, is the biggest help, plus SOSes on daily charts, and reaccum areas, plus angling up and absorption. All the exact same tools used for everything I do. The other thing is the news, like earnings, and also multi-month or multi-year highs vs multi-day or multi-week highs.

For pure daytrading focus, news is extremely important. Learn what is NEWS and what is “news”. Is “new” in the reported news, or not. Is it a pure press release from the company. Then it’s likely a pump. You get better over time working with this stuff. Also, the huge gappers, like 50%+, I am very leery of those (see VWAP below) as the probabilities of a sustainable, tradeable run are less. However, to say, I developed a pure BOUNCE trade setup years ago, and that setup is always a possibility. Even on a stock putting in a big top for the day. It depends where/how far along that the top process is, early on the bounce trade setup works very well After the (likely) #2 EA top, the bounce trade is much less probable to work. And all of that stuff has been discussed over and over, as to the specifics. The stocks which have the smaller gaps, and are breakout stocks, are much more likely to have sustainable runs. Dependent on the quality of the company, possibly multi-month or more runs, but we’re talking daytrading for now.

I do not rely on any indicators, purely price and volume, but I do take a look at VWAP (it is a volume indicator, avg volume) with daytrader stocks only, but not as a trading indicator itself, meaning as something to give triggers. The only thing I do with VWAP is to take a glance at it during the day to “tell” me if most people are up or down on the day on the stock. Where most of the volume of the trading has come in, at what avg price. And where are we in relation to that. Meaning, is there overhead supply or not. Now to say, the very best way to do this is by really working hard and studying charts. and not relying on any indicators. Price and volume should be the essence of it all. I basically look at VWAP as a confirmation of what I’m seeing, but really, not even sure if it’s helpful, but it seems to be. But again, purely as where people stand – overhead supply or not.

Now as to earlier, the huge gappers, think about it. all the volume that comes in with the people chasing it into the big gap, and the huge volume that comes in there. So if the stock rallies a bit more, and then starts falling, and goes to a new low on the day, almost everyone (volume-wise) is down on the stock, they are below VWAP. But do you need to even see VWAP to know that? No. It’s why I will look at it later in the day, during the reaccum? area. And this also plays into what else? What do I talk about with the opening trading range of the day? I want to see a range form, and then the stock go to a new high for the day on solid green volume. Then VWAP is below the stock, no overhead supply. Ease of movement. The stock is strong, at least for a few hours. Of course this is all probabilities. I’m trying to get you guys to see that. And you develop trade setups around this. Also, overhead supply, daytrading? What is the difference between that and looking at daily and weekly charts? Nothing.

The scanners below are for after hours today. The first two are more position trade type scanners. The other one is more daytrade type stuff, tho there is a lot of overlap. I use these for preparing for the next day. In the morning, the scanner is used for new stuff. Also, notice the crypto stocks on there – MGTI, RIOT, MARA, DPW.  Breakouts in many of these stocks. I left a message on 6/22 in the comments section about BTC. That will be discussed in the morning, but in it I said that I will be looking for the next big rally in BTC – after July 4, and look for the setup to take place – that is how it played out. A few friends wrote to me recently, and I told them that I believe BTC was setting up for a breakout of 6900. I have been watching this, and identified the stocks to watch, looking at the trading ranges, the mid level breakouts and the upper level breakouts. I traded DPW today in and out twice. MGTI still long. RIOT was the best one, I missed it. Look at the beautiful breakout. And again, the mid-level reaccum, the mid-level breakouts, and look at the volume coming in on the mid-level breakout. Then look at the volume pouring in on the breakout of 4.90, and the retest and the abating volume. Here are the MGTI and DPW setups and breakouts. And go thru with the same perspective as with RIOT. You can anticipate the breakout with mid-level stuff, you can buy the bigger breakout, you can buy the retest, or you can try a trend absorption and/or reaccum trade once it’s fully in trend up mode. DPW had a couple nice pullbacks.

 

 

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About traderscott 1067 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

2 Comments

  1. Thanks Scott, I’ve spent quite a bit of time today trying to sort this out (and over the last couple of weeks), I MIGHT be starting to get it.

    It has been helping me to think of the process rather than the outcome. I know that you write about that often, but looking at it with the different words (I think you use work and money) has helped me. I have been reading “The Obstacle Is The Way” by Ryan Holiday, a modern study of Stoic philosophy, and have found it very applicable to trading mindset for me. Getting my emotions (fear of loss, fear of missing a good opportunity, etc) out of the way and thinking only of the work. Like a basketball player working on their free throw. Like learning muscle memory, but instead having it be “trading memory”.

    • It is a mental challenge to stay focused on the process itself. But just focusing on the day to day studying, researching, preparing, building muscle memory yes, and you look up months later and realize how much more insight and experience you have. Psychology books are outstanding.

      Keep honing. Almost everyone gets down and doesn’t follow thru because of dejection and will never get to a more elite level purely because of lack of effort and stamina. Just have a strict detailed overall approach and specific plans which form the approach including 1 or a few very specific trade setups. Most people will never understand why I say very specific trade setups. It is how you really believe in what you are seeing, because you believe in the probabilities.

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