- How to find stocks who day trade and swing trade.
This is one of the most commonly asked questions
from new traders on my YouTube channel.
So in this video,
I'll be showing you the step by step process for beginners
to start scanning for stocks to trade for free.
Without any fancy premium scanners or news platform.
The goal of this video is to teach you how to start planning
and working independently and build your own watch-list
and find winning trades without being a sheep,
relying on scanners or chat room alerts.
As always, if you enjoy step by step videos like these,
make sure to (mouse-click) drop a like
and (mouse-click) subscribe
and (bell dinging) ring that notification bell
if you want to learn more from my channel in the future.
Step number one would be scanning for the stocks to trade.
And my favorite free scanning platform is Finviz.com.
This is still the most beginner friendly website,
and again, it's completely free to use.
So start with going to Finvis.com.
And over here, you can see that once you're on the homepage,
you get a broad market view of everything
that's happening in the market.
Now the place we want to focus on is the Finvis screener.
So go back to the homepage and from the home page
and click screener on the top over here, screener.
And this is where you can input all the filters
and scan for stocks.
That's only matching the criteria you have,
and I'm gonna show you the criteria right now,
and but first of all, let's close my ad
Google ad on the top.
Yes, I was shopping for some shoes. (shushing)
So over here, I always start from the descriptive filters.
I leave exchange blank because I like to scan for both
NASDAQ and the YC and the AMAX. I don't discriminate.
For market cap, I would prefer to scan for stocks
that's under 2 billion market cap.
I like to separate the small cap scans
and the large cap scans.
For this example, let's go ahead with a small cap scans.
So I'm going to select small under 2 billion market cap.
So we got the market cap.
Earnings days, you can leave that alone.
Target price, I'd leave the alone as well.
Index, dividend yield, everything.
That's, I leave that alone.
Now what I care more about,
I don't even care about the average volume.
Now what's more important in the current market condition
is relative volume.
If you are ever concerned about any of the key terms here,
if you hover over the word you're looking at,
let's say relative volume.
You can see that relative volume means the ratio
between current volume and the three month average,
that's intraday adjusted.
By using this key metric,
you're gonna find stocks that's increasing in volume
steadily on the daily chart.
And that's a very important in the current market condition.
And if you're a new trader,
a very important concept to start understanding
early on is that you need the volume to proceed
the breakout successfully.
If you don't have volume,
the breakout on the stock is most likely
going to pop and fail.
So that's the reason we are searching
for relative volume, ideally over one or even two.
So let's try over 1.5 for now.
The next key metric that's very important to put
on your filter is current volume.
So if you hover over the word,
it will show you that current volume means
the number of shares that's being traded today.
And for us, we definitely want something
that's more than 1 million.
For this demo, I'm going to do over 5 million
and see what we get.
So there's other stuff like country,
options and shorts and price.
So I think for me, I'm going to scan for stocks
that's under $10, especially when it comes to
the small cap stocks.
Again, we can always expand the range
if we don't get enough results.
Okay, so you can see that
once we have all these four filters,
we get two pages of results and a list of tickers.
So by default, you see the ticker, the company, the sector,
the industry, the PE ratio, and the change on the day,
et cetera, and the volume on the very right side.
But for us traders,
we want to see the daily chart
because that's where we're gonna do the next step later on
when we do technical analysis.
But for now, let's go up to,
you can see we are at overview right now, but for us,
we want to look at charts.
So you can see once you click the chart,
you actually see what these daily charts for all the stocks
showing up looks like.
You can see we still have two pages of examples.
By default, they give us the technical one
but I prefer the type to be candlestick charts.
So now this is where we can see the recent
three month charts and what it looks like.
Alright, so now that we have a list of stocks
that's matching our criteria of being a small cap stock,
relative voting over 1.5 and current voting over 5 million
and price under $10.
We have a good list of stocks over here.
You can see a one page is probably at 20 stocks
and the daily charts to look at.
I know at this point you must be thinking,
oh, can we just buy all these stocks?
No, don't do that because we need to go on to
step number two, which is technical analysis
on the daily chart.
For us short term day traders, we want to look for stocks
that's consolidating on the daily charts and slowly
about to setup for a breakout.
What a true breakout will look like,
will look like this stock, GROM, over here.
So if we click it and go to the daily charts here,
you can see that the stock came from $2
all the way to about $4.
And here is reaching some resistance around $4,
and it has tried breaking out to $6.
So this will be one of the stocks I would further analyze
on my broker platform.
Another good example here would be the stock NXTP.
If we look at the chart on the daily,
you can see that this thing consolidated
and held the support around 1.30 for a couple of weeks.
Then once it broke about 1.50 and later on around $2,
it's starting to break out from 2 to 2.30.
So this will be another stock that we can look at later on.
Another one here from our scan is CEI.
You can see this team broke multiple resistance,
it broke $1 resistance and other resistance here at 1.80.
And once it broke all these resistance,
it went to the upside, from 1.50 all the way to almost $5.
Now it has since then came all the way back down
so the breakout for this stock is over.
But this is essentially what you're looking for,
the earlier parts before this huge breakdown.
All the other stocks that we just talked about has a chart
that looks very similar to the parts,
preceding the breakout on CEI.
And that's the reason we are scanning for those stocks.
So besides looking for stocks that's breaking above
some recent resistance of breakout charts,
I also want to see increasing volume on the daily chart
because in order to have a true breakout with a stock
breaking above resistance to the upside and hold above it,
you need more people buying it.
It's actually pretty simple,
increasing volume precedes the breakout
and consistent volume sustains the breakout.
So that's why volume is so important.
That's why we didn't just scam for high volume stocks,
but high relative volume factors 1.5 to 2.
So now that we've selected the three stocks
we want to focus on and further analyze
it's time for step number three,
which is preparing for watch lists on our broker platforms.
So now that we're on my broker platform,
you can see I'm using Thinkorswim as a demo.
So the first stock we're gonna look at is CEI.
You can see this thing came all the way from 50 cents,
and once it broke above a lot of resistance up here at
all the wicks up here,
you can see some resistance at 1.70 and 2.40s,
and also later $3.
This thing just took off almost to $5.
Now this will be a good time to give you an introduction
to support and resistance because every time I asked
for support from my ex-husband,
all I was given was resistance. (drum playing)
(beeping) Okay real talk, please be supportive
of your loved ones, endeavors or struggles,
because otherwise you're going to be that person
messaging them many years down the road,
asking for stock analysis.
Okay, so a crash course on support and resistance.
Support other areas on the daily chart,
where historically buyers came in to buy the stock.
So we can see for CEI, the previous support
down here, where you see buyers come in and on 60 cents.
And later on, over here around 1.20,
and then all the way here, some little support,
you can see the stock held that area for about 1.70s
for an extended amount of time.
So those are going to be support for the stock.
Now the other side will be resistance.
Resistance levels are the areas where people came in
to sell the stock, so this will be the opposite of support.
So you can see that for the same example, CEI that's a,
I bought the stock at 1.70.
In the past, when a stock rang up to 3.10,
or all the way up here,
around $4, that's where everyone's sold the stock.
So myself included, if I see that there's resistance as $3,
I would also probably sell.
And you can see, it will be the same thing here.
People came in to buy the stock around 50 cents and the ones
that held these levels,
you can see this line here around a dollar, a dollar here,
that's the prior support all the way
from the daily over here,
people came in to buy and a stock when all the way to 1.70,
the resistance we talked about earlier and then pulled back,
held us small, high or low support, 1.50
didn't quite pull back to $1
and broke out above that 1.70 resistance
in a stock just took off to the next resistance
up around 2.40s,
3.10s, and later on to almost 4, $5.
Okay so looking at a CEI chart,
you can see that the stock already had its breakout.
It went from 50 cents to a $1.70 and all the way to
almost $5, but now it's been selling off.
And even though recently we bounce from 90 cents
to around 2.40s here, we sold off.
We didn't hold the breakout. Right?
You can see the stock didn't hold above $2.
So it's back under that 1.70 resistance,
1.80 1.70s resistance over here.
So for us, if we're looking into a longer stock,
there is really no long on the stock until it broke above
the resistance is sets in, on this day, 246.
So this is gonna be the key resistance
I'm gonna right click and make this line white here.
So that's going to be the key resistance.
So I'm going to set an alert,
that's also part of the process
of preparing for a watch-list.
You don't just buy or sell any random stock.
You wait for the stock to actually hit those levels
and then you can look at the stock.
So I want to know when CEI
breaks above this 246 in the future,
because remember what we said about breakout
in step number one, it's only if a stock
can break out successfully above a prior recent resistance,
which in this case will be 2.46.
Then this thing would have upside
to potentially go to $3 or
3.70 and $4
and above.
So until that happens,
I'm going to leave CEI alone.
So what we can do here is go to a left side
and put that on our watch list, I'm going to put CEI here.
So the next stock for us to analyze the GROM.
So first of all, I want to go to a daily chart
and make sure I'm looking at yeah, max available.
You can see this thing didn't have much
volume on until recently.
On the daily chart,
the volume bar view can look at this.
The previous trading volume is very low,
only about 400,000 shares.
And again, remember what we talked about in step number one,
we want to trade stocks that's trading
at least 1 or 2 million shares average on the daily.
So it's only until recently on this day,
this is traded over 50 million shares.
So this is definitely worth our attention.
So once a stock broke out with high volume,
you can see a trade above all these recent resistance.
So on a daily,
you can see the previous high over here is 4.90s.
And after that, the stock sold off.
So that's a reason,
that's going to be the most recent resistance.
And over here, you can see buys
started coming in around these areas.
Why? Because you can see over here,
it consolidated and held the $3 areas for multiple days.
This day, this day, and all the following updates.
And over here on the previous,
I guess a couple months earlier, it also held at $3 mark.
So that's why we know that's going to be a support
for the stock.
In resistance is going to be this area about 4.90.
If you round it up to the reason highs
are going to be around $5 to 5.50s.
So this area is going to be the resistance for GROM.
And you can see that. Yes, sure.
It has the resistance on $5,
which it's kind of holding below right now,
but you also have these areas around 4.40s,
4.50s has been bought up.
So what I'm gonna to do here is, I want to know when a stock
breaks the most recent resistance around 5.50.
Now, it doesn't mean to just buy the stock
when I hear the alert.
It means that I want to look at the chart on my platform
and assess the chart and the price action intraday.
And whether there's consistent volume,
remember if the volume is inconsistent,
the breakout is going to pop and fail.
So I'm going to set this white line here.
That's gonna be the key resistance for the stock
to breakout above and hold above it
to continue to go to potentially 6.70s.
So that's going to be very interesting.
So I'm gonna to set an alert right here.
Right click, create alert.
So I will know when a stock hits 5.48 or 5.50.
Now I'm gonna put that also on the watch-list GROM.
So this will be my process for drawing out the support
and resistance and setting alerts on my broker platform.
Again, just because you're setting alerts
doesn't mean you just buy or jump into the stock right away.
The broker alerts are here to signal you when a stock
is breaking through that resistance level you planned out.
A really good example of what that means
is on this stock. VYGR.
This is the intraday chart.
You can see it touch and broke that 4.60 resistance
around 11 o'clock.
But if I just jump in and buy the stock right away,
I'll be dragged down to about 4.40.
So that'll be a 20 cent loss.
The idea is not to jump in right away,
but rather to observe and look at a stock
and how it's trading on the charts intraday.
So if I see a stock hitting 4.60,
I wouldn't jump in.
Instead, I'll start looking and seeing
whether it's slowly trending up
and whether there is a long setup.
So we can see once it pulled back from that resistance
it's slowly trended up higher and making higher lows.
And once the second or third time we retested
that's when it finally broke out to 4.90, almost $5
and to new highs near the end of the day.
It's true. Not every single stock you find on Finvis
and the ones you find on your watch-list will run
like you had planned,
but the most stocks you find that meet your A+ set up
that has the right volume,
the right breakout daily charts and the right levels.
The more prepared you will be when you are alerted intraday,
when day trading.
Most of the work done in trading happens outside
of regular market hours.
That's where I do the most of my preparation
charting and entering my trading journals.
And during market hours, I'm just observing
and watching the stocks I prepared on my watch-list
and pressing buy or sell buttons if I see them breakout
and hold above the levels that we talked about.
Let me know if you enjoy this video
and watching my process for scanning,
for stocks to trade and preparing for potential runners
and the watch-list.
If you want to learn more in depth about my trade planning
process for the small caps and the large caps,
make sure to check out my website at humbledtrader.com.
If this video helped you out,
please remember (mouse-click) to drop a like
and (mouse-click) subscribe,
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day trading content like these.
Thank you guys for watching, I'm the humbled trader
and I'll see you guys next time.
(instrumental music)