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1. Best Day Trading Strategies Transcript
1. Title Slide
2. Good day traders this is Roger Scott from Market Geeks with another day trading
video tutorial for you today. Before I begin I want to remind you to subscribe to
our video channel for trading videos and trading tips and don’t forget to visit
MarketGeeks.com for your free trading report.
3. Anyone who has basic experience day trading will tell you that one of the biggest
challenges for most traders is finding stocks and other markets that are moving
with sufficient momentum and volatility to make day trading worthwhile. I can tell
you from personal experience that there's nothing more frustrating than getting
into a fast moving market only to see it slow down immediately after my entry
order has been filled. Because day trading is based on intraday momentum, you
want to make sure the markets you chose and the strategies you pick have
enough momentum to justify your risk.
4. You want to start with the daily chart so that you can see the past trading history
and the characteristics of the market you choose to trade. I start out by
monitoring stocks that are close to 90 day breakouts. As you know based on my
previous articles the 90 day breakout produces the highest ratio of winning to
losing trades. The best candidates for my trades either gap up to a 90 day high
or reach the 90 day high by way of extended trading range. I will show you both
examples so you can get a good idea of the type of set up you need to find.
5. Once the stock breaks out above the 90 day high I wait for a confirmation signal.
There are too many false breakouts and I want to make sure that the momentum
is real and not ending immediately after the price breaks out of the trading range.
My condition to entry is a gap day following the breakout from the 90 day price
high. This means if the price broke out of the 90 day range by way of gapping up
I will want to see a second gap day prior to my entry. You can see in this
example how the stock breaks out and once again gaps up for the second day in
a row. This is would be sufficient for me to justify entering the stock.
6. Once you get a solid confirmation by way of a second gap, you can safely enter
the market. My advice would be to watch the market carefully prior to the opening
and get a feel for the stock you are trading. If the stock or other market you are
trading opens with a gap up you can safely enter a market order assuming
there's sufficient volume in the market you are trading. Most market orders get
filled instantly so you will be assured that your condition to entry has been
completely satisfied prior to your order being executed. Once your order is
executed you stay with the trade till the closing bell. Since this is a momentum
strategy the odds of the closing price being in the top 20th percentile of the
highest price is roughly 80 percent so I suggest you hold the trade till the closing
bell and exit MOC or (Market on Close)

2. 7. If you were paying attention a few minutes ago you might have noticed that I said
that the first or the initial breakout outside the trading range does not have to be
a gap but can be an extended range day. I want to make sure you clearly
understand the concept of extended trading range so this example utilizes a
stock that breaks outside of the 90 day trading range through volatility and price
instead of gaps. Everything beyond that point is the same except the initial set up
can substitute the first gap if the extended trading range is sufficiently strong
enough. There's a formula to calculate the extended range but I will save that
explanation for another day. Here you can see how the stocks trading range is
almost triple the recent trading range for this stock. This is the type of strong
trading range you want to see breaking out of the 90 day price high.
8. Once you identify the stock with a sufficiently high breakout range or a gap as we
saw in the previous example you can begin monitoring it prior to the next day's
morning opening session to make sure you see a gap opening. Remember that
no matter how good the initial breakout looks you have to make sure your entry is
preceded by a gap no matter what. Here's a perfect example of an extended
trading range breakout followed by a gap immediately prior to entry.
9. You can see in this final example how the entry and the exit appear on an
intraday chart. Notice I wait for the gap and then enter a market order
immediately after the opening gap. The order typically takes about 3 seconds to
execute on a volatile market. I recommend you watch the market closely prior to
the opening so that you are ready to go when and if the gap occurs. The stop
loss level is placed $0.05 cents below the gap bar so you should have no
problem identifying it and placing it immediately after you are filled.
10.The Momentum Breakout is one of the easiest and productive day trading
methods for traders looking for momentum set ups. Remember that the breakout
can be either a gap or an extended range bar. Either way, you cannot enter the
trade prior to a confirmation gap that occurs at the second opening. Make sure
you place your stop order immediately after you receive your fill and don't try to
exit the strategy prior to the closing bell. This is pure momentum so you want to
make sure you give the strategy time to work.
11.That’s it for today’s video tutorial. Don’t forget to subscribe to our channel for
trading videos and trading tips and visit marketgeeks.com for your free trading
report. Wishing you all the best from market geeks.
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