I made over $10 million with this Momentum Day Trading Strategy. I look for the leading percentage gainers each day, then I evaluate the top 3-5 of them. I'm looking for a stock that has the following 5 characteristics: 1. Price between $2-20 2. Relative Volume at least 5x higher than 14 day average 3. Up at least 10% already 4. Ideally has news 5. Has a float of less than 20 million shares
Once I find a stock that meets those criteria, it's time to look at the chart. I prefer stocks that are above the daily 200ema, but will trade below the 200ema if they have a lot of room to squeeze up to that level. The reason I wouldn't trade something right below the 200ema is that it will serve as resistance.
If the daily chart is good, I'll look for an intraday chart pattern where I can establish an entry. My favorite pattern is the micro pullback. I trade this on a nearly daily basis. It's one of the best ways to get into a fast moving stock quickly. Once I'm in, I'll often add to the winning position. I like to add to my winners and cut my losers quickly. I take profit when I see a sign of weakness.
Signs of weakness include: 1. Big sellers on the Level 2 2. A topping tail candle wick 3. Bursts of sell orders on the tape 4. More than 3 halts up can mean a reversal is coming
This is not comprehensive to my entire strategy, but it's a good summary. I hope you found it helpful!
Before we continue...👀
💰Remember, day trading is risky and most traders lose money. You should never trade with money you can’t afford to lose. Prove profitability in a simulator before trading with real money.
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