Getting Information Before the Market Opens and Building a Watch List
A stock trading strategy requires you to turn on computer about an hour before the market open and start gathering overnight broad economic and financial information and focusing on stocks with new trading alerts based on earnings or analyst recommendations and stocks releasing news. These are stocks that are rumoured to be in play and are anticipated to provide the most significant price movements on high volume for that trading day or week.
Another important task to do in the first step of stock trading is to check morning equity options pages, where you should look for stocks with significant increases of volume in calls. Any increase in calls written is an important indication that a price increase or decrease above or below the option premium is expected to occur.
The result of premarket activities in stock trading strategy is an initial list of stocks, which could move the markets that day or week.
Watching Carefully the Market Opening Session and Narrowing the Watch List
Once the market opens, you should watch the initial list of stocks in relation to the rest of the market: are stocks on the list going up when the market goes down? Are they significantly increasing in price in relation to the rest of the market? Are they behaving consistently with your expectations based on your pre-market assessment?
You should then narrow your watch list to include only the strongest stocks: the stocks that are increasing more rapidly on higher volume than the rest of the market, the stocks that are trading contrary to the market and the stocks whose movements are clearly being propelled by external factors.
Analyzing the Charts and Looking for a Breakout by using your indicators On QC Pro ED.
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