Premarket Preparation Part 3
“Give me 6 hours to chop down a tree, and I will spend the first 4 hours sharpening up the axe”
Our premarket preparation classes are demonstrations of advanced trading concepts for preparing to the trading day ahead.
Hunting The Best Stocks
In this lesson, Michael explains the parameters you need to pick the best stocks for your trading day.
How to find the best stocks to trade
In this lesson on pre-market preparation, we focus on how to find the right stock to trade. The video emphasizes the importance of adequate preparation to succeed in trading and suggests spending at least an hour or two before the trading session analyzing the market and understanding the sentiment and news that move the market.
How to start
The first step in finding the right stock is using scanners, like we covered in the previous lesson. We recommended looking for stocks with a lot of volume and a strong momentum move in either direction.
Analyze the market
The video demonstrates how to use pre-market movers and identify a few stocks worth watching. It’s best to skip over lower-priced stocks and focus on those with a higher value.
After that you should analyze the stocks further by looking at the news and identifying specific catalysts that may affect the stock’s price. It is important to understand why the stock is moving in a particular direction and determin if the news is specific to that stock or a broader market trend.
Example
Using NVIDIA as an example, the video shows how to research the news and understand why the sentiment is negative, and the price is dropping. It discovers that Baird downgraded NVIDIA to natural from outperform, which explains why the stock’s price is dropping.
Summary
Finding the right stock involves using scanners to identify stocks with a lot of volume and a strong momentum move. Analyzing the stock further involves researching the news and identifying specific catalysts that may affect the stock’s price. The video emphasizes the importance of understanding the sentiment and news that move the market to prepare adequately for trading. By following these steps, traders can increase their chances of success in the stock market.
Read more about pre market preperation on our blog.
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