Scanning is the systematic search for stocks based on predefined rules, crucial for identifying potential trade candidates. Rules may encompass fundamental, technical, or a combination of criteria tailored to specific trading strategies.
TraderHR’s strategy centers on breakouts from consolidation periods in stock charts, particularly chart patterns. Focusing on stocks forming chart patterns with clearly defined breakout points is paramount to the strategy’s success.
A daily manual scan of every chart is an essential part of the strategy, considering criteria such as a stock price higher than $3, average daily volume exceeding 500,000 shares, and positive performance for the day labeled as “TODAY UP” (See Picture below).
Finviz.com offers a practical and free scanner, facilitating the efficient analysis of a large number of stocks/charts. The scanner, configured with specific parameters, typically displays several hundred to a thousand charts.
Each stock is manually checked during the scan. Selection criteria include stocks with a clearly defined uptrend over recent months and those consolidating within specified chart patterns.
From approximately 500 manually scanned stocks, around 5-10 meet the required specifications and are selected for the watch list.
The careful selection process ensures that only the most promising trade candidates make it to the watch list.
