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"How to Find Stocks to Invest or Trade Quickly" by Martha Stokes CMT

TechniTrader Scans Provide Market Condition Results and Stock Picks Quickly

 For every individual investor and retail trader, time is a huge cost factor. Every hour spent working on chart layouts, trying to learn how to invest and trade, watching webinars, or going to weekend seminars is a cost to a personal trading business. Time is an expense.

One of the best ways to cut down on that cost is to develop simple procedures that are used every time for any certain aspect of investing and trading. It is important to find quality stock picks quickly, and assess their potential just by looking at the stock chart.

The TC2000 chart example below demonstrates this conceptual analysis for finding stocks quickly.

TechniTrader teaches How to Find Stocks to Invest or Trade Quickly chart 1 - TechniTrader

The first and most important thing is to determine the current Market Condition, of the six conditions which can occur in the market today. I developed a tool for doing this for individual investors and retail traders, called the “TechniTrader Market Condition Analysis Scans” which can be installed into TC2000 and MetaStock charting software programs. Analyzing these scans takes just a few minutes in order to determine the current Market Condition.

Once the current Market Condition is determined then choose the scan that is suitable for that particular condition and your personal trading style, to look through for stock picks to invest or trade. Finally decide which strategy to apply for each stock pick, depending on the current Market Condition.

Here is a one day example of how fast this process can be done using TechniTrader Market Condition Analysis Scans:

1. TechniTrader Momentum Buy Scan:  on this particular day the scan shows all of the stocks in it moving with momentum to the upside. However out of almost 6000 stocks in the market, the total result in this scan is 130 stock charts.

2. TechniTrader Momentum Sell Scan: shows all of the stocks moving with momentum to the downside in this scan. However out of almost 6000 stock charts in the market on this particular day, the total result in this scan is 45 stock charts.

Just that quickly the Bias of the market, which is up and lacking momentum is revealed after looking at the results in these two scans. Either one of these two scans must have a total result of 150-400 stock charts for momentum to exist either to the upside or downside.

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3. TechniTrader Institutional Scan: shows whether the Buy Side Institutions are buying quietly in Dark Pools, if High Frequency Traders HFTs are extremely active creating speculative trading, or if smaller funds and retail traders control price. It has a total result of 173 stock charts on this day which is a low number, and indicates that there are predominantly High Frequency Traders controlling price with smaller funds and retail chasing after them.

4. TechniTrader Bottoming Scan: shows how many stocks are in true bottoms with Buy Side Institutions buying quietly in Dark Pools. On this particular day there is a total result of 45 which is very low, so that indicates there is not a lot of bottoming activity right now. It also confirms what the Institutional Scan revealed, which is a lack of Buy Side Institutional interest. This is very important to know when determining Market Condition, and at a glance of the total number of stocks that showed up in comparison between the Institutional and Bottoming Scans provides that information.

5. TechniTrader Consolidation Scan: brings up all of the stock charts that are in smaller sideways action from compression patterns, consolidations with small doji, to platform wide sideways candlestick patterns. This immediately reveals the strength of the current overall Bias, and the direction of the trend in motion at this time. On this particular day the total result of this scan has 406 stock charts. This is a solid number and tells individual investors and retail traders that they should be looking for compression candlestick chart patterns and breakout setups.

6. TechniTrader Overbought Scan: shows how many stocks are stuck in Trading Ranges that are turning down. This is the second sell side Market Condition Analysis Scan in the TechniTrader set, and provides crucial information in a glance. On this day there is a total result of only 15 stock charts, so it immediately reveals that oscillators are not going to function well in the current Market Condition. There are not that many stocks in range bound patterns that are peaking.

7. TechniTrader Relative Strength Index RSI Scan: shows how many stocks are under quiet accumulation where giant lot Buy Side Institutions are controlling price, with special Dark Pool bracketed automated orders that contain price in a unique sideways action. On this day the total result is 36 stock charts, so this confirms again in an instant that Dark Pools are not quietly accumulating.

To learn more about TechniTrader Scans email info@technitrader.com

So now putting all the scan information together we know the current market is speculative, that stocks are poised for sudden explosive moves triggered by computer generated orders of the High Frequency Traders, and that Dark Pools are not active. This means follow through will be mostly smaller funds and retail investors or retail traders.

Since retail and the large group of smaller funds trade similarly we can also determine that runs which start with momentum, will end more suddenly and profit taking by pros will be on the way up before the stock hits resistance.

Consequently this information means using momentum style trading, with resting day candlestick patterns or compression candlestick patterns in stock pick selection would be best. These patterns are easy for most traders to find.

Below is chart example #2 which is the same stock as chart #1, which shows a compression pattern and the results a couple of days later after the stock pick selection process.

TechniTrader teaches How to Find Stocks to Invest or Trade Quickly chart 2 - TechniTrader

Summary

Finding stocks to trade quickly begins by determining the current Market Condition. Screening all listed US stocks through seven different criteria Scans that instantly pull up results revealing the following information:

  1. The bias and direction of the market
  2. The energy and continuing strength of the trend
  3. The sustainability of the trend
  4. Who controls price, and how price behaves when they control it
  5. How long the runs will sustain and with what momentum

Consequently it is then easy to focus only on finding those stock charts that have the proper set up for that particular Market Condition. This makes it easy finding stocks to invest or trade quickly.

One of the huge benefits of modern individual investing or retail trading, is the increased sophistication of the charting software available. Not that long ago, charting software was far more basic. Try to avoid the mistake of using Broker based charting software, because it may be free but the time factor in using it is going to cost far more than a subscription charting program.

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Go to the TechniTrader.com Learning Center and watch a wide variety of webinars, to experience for yourself the excellence of TechniTrader education. TechniTrader has a TC2000 Library of Webinars.

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Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using TC2000 charts, courtesy of Worden Bros.

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Instructor and Developer of TechniTrader Stock & Option Markets Courses

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