How to find your best stock pick for the day

Ideas how to find 10 best stocks for trading

This job can be divided into two parts:

• The first part can be automated and done by some stock pick or stock analysis software or Web site screener. The result of this first step is a list of possible best stock picks that should be reviewed during the second step.
  


• The second part is to review every stock chart in list. Don’t worry; when you practice basic rules and reviewing, you can make an individual selection very quickly.

1. Stock price has to be over $5 USD
2. Average daily volume has to exceed 450,000 shares.

The next rule is relative to trade type (whether I plan a long or a short trade):

• Price has to be over 50EMA ( exponential moving average ) for a long trade setup or below for a short trade setup

Hey, great. This is the first complete set of rules that can be used independently. I personally use them for trades based on my sector trading strategy.

I like to use support and resistance . Breakout and also Pullback strategies are based on them. Therefore, I want to have a scanner that will find stocks with a price near a significant level of support or resistance.

I define this level as the last three months of maximum or minimum stock price. My scan rule is to find stocks with the last price less than 5% of the three-month maximum or minimum.

Volume plays an important role in simple stock trading and analysis so I recommend you include a special volume rule into the scanner. This rule is based on the condition that we’re looking for a stock that’s picking up. So, the rule is to find stock that’s had above-average volume sometime during the last 20 days.

Well, here’s the list of all rules:

1. The stock price has to be over $5 USD.
2. The average daily volume has to exceed 450,000 shares.
3. The price is over (for long trade) or below (for short trade) 50 EMA
4. The price is no more than 5% from the three-month maximum (for longs) or minimum (for shorts)
5. Stock volume exceeds average volume some time during the last 20 days

These five simple rules allow you to find your best stock pick for the next trading day. Automatically.

You can define these rules in your technical analysis software. I like AmiBroker very much, and I think it’s the best software for picking stocks and for stock analysis.

If you like it too and want to receive these scanners for free with already written formulas for AmiBroker scanner in AFL language, just fill this form:

Yes, I want to receive free scanners for AmiBroker , the technical analysis software:

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