Day Trading Strategy 🙏 the Gap and Go ↗️📈

what's up everyone all right so today i'm going to talk about trying to find stocks to trade one of the biggest challenges with being a day trader is finding something to trade there are thousands and thousands of stocks and you can go on reddit you can go on forums you could go in chat rooms you could find stocks a million different ways and i have found a way that for me works really well and so what i'm gonna do here is i'm just gonna cut through all the kind of bologna you guys know who i am i don't even tell you about me i don't need to tell you about why i'm credible if you want to see my broker statements you can actually see them on my website warriortrading.com i'm just going to tell you about this strategy which is day trading gappers so one of the challenges of course with learning how to trade is finding stock to trade one of the other challenges is finding credible information that's useful helpful and helps you grow as a trader so what i want to show you here is a perfect example of trading gappers so this is the topic for today it's an excerpt straight from the warrior pro courses obviously i teach classes over warrior trading we'd love to have you guys join us if you want to learn more come over to warriortrading.com strategy there's a special page there that's specifically for you guys checking out this episode here on trading gappers so let's go ahead and jump in but before i do i'll remind you as always that trading is risky in case you didn't already know that and my results are not typical so you should not assume that you will achieve the same or similar results as me and you should not try to blindly follow me or anyone else you've got to learn the strategy and ultimately that's the biggest challenge with getting started trading finding a strategy a system of where am i going to find stocks to trade and then once i find them where am i going to get in where am i going to get out et cetera and that's what i teach in the warrior pro class so this right here is um chapter um chapter seven gap and go trading now gap and go trading is a fairly long chapter it has several parts let's see i can jump forward to it uh let's see what chapter is this this is chapter eight by the way this slide deck is over a thousand slides so it's uh it's pretty packed but uh so here's chapter seven gap and go so this is we're going to be kind of getting into some of the basics here now i'm going to talk about the process of reviewing the gap scanners but before i get in that far let's just step back for a second and let's look at this chart okay so what are we looking at here let's get oriented what we're looking at is a stock that right now at this very moment is up 225 percent i'm up 77 999.99 on it which is a terrific green day okay it's got 111 million shares of volume you can see that right there so those are the number of shares they've traded hands and it's a nasdaq stock it's listed on nasdaq it's not listed on the american exchange or um nicey or on the otc exchange all right well is there any inclination that this stock was going to make this huge move from 12 all the way up to a high of 28 and 83 cents we'll mark out the high right there well you know why don't we clear all of our lines and kind of just get back to basics keep this really simple i'm not gonna in this video break down the nuances of drawing trend lines and things like that we cover all of that extensively in the classes i also have other videos on youtube here and there where i hint and sort of talk about the process of drawing these lines so i'm not going to go into that right now but what you can see is a fairly clean and fairly simple chart i have volume bars i have some moving averages i have the volume weight average price this morning indp was gapping up 67 what does it mean for a stock to gap up does anyone know it means that it's gonna open today higher than it closed yesterday so yesterday the stock closed at about seven dollars and this morning it opened at 11.85 representing an impressive 67 gap on the daily chart so the word gap comes from the fact that this chart which is a daily chart has this big gap right here all right so some right right that's that's the gap maybe it's uh oh it's actually from about 705. in any case so that's our gap on the daily chart so this stock was gapping up yesterday it traded on approximately 170 000 shares of volume and today is trading on 1 310 times relative volume with total volume of now 112 million shares how does the stock go from 170 000 shares one day to 112 the next day news so this stock did have breaking news this morning uh which of course is what typically creates a gap so the stock had news you can see it out at 7 00 a.m right here and i'm not a fundamental trader i'm not really dissecting the quality of the catalyst there are times where we'll see a headline that sounds really great you know a stock has like fda approval for um you know a nasal spray for treating migraines and then the stock drops 25 and you're like how is this possible this seems like great news so i try not to over analyze the news and i just recognize that there is news and if the stock is moving up then clearly the market is responding positively to the news so i guess the news is good that means i'm a technical trader i focus on the technicals more than the fundamentals so this is the chart right here the stock started squeezing up at 7 am as soon as the news came out and it actually squeezed from 750 up to 10 briefly it pulled back and then it rallied up to 10.50 it pulled back and then it rallied up to a high of 1287. and there were certainly some traders who were trading it early in the morning who maybe sat down on the early side and saw that this was an opportunity how would they have seen it how would they have known the stock was moving right here this right here is actually software that i developed for my students and i use it myself we all use it and this software scans the entire stock market for stocks that are gapping up so right here we have it sorted by the leading gapper so every student who's in our warrior pro classes in the part of the curriculum and part of the community when you log in each morning you can log into the chat room you can see me trading and you can also see this gap scanner so this is our small cap top gappers and you can see there were a number of gappers today i look at something at minimum up five percent if it's up at least five percent that's to me uh statistically significant but we also look for stocks down more than five percent because sometimes those present opportunities uh either to short it or for a gap down reversal but i'm going to focus primarily here on the leading gapper so each day when i sit down i'm usually looking at the top five leading gappers the leading gapper is the one that's up the most and sometimes it's a stock that's like you know 60 70 cents it's too cheap i don't really want to trade it i don't really get into trading penny stocks sometimes it's a stock that's too expensive it's 100 a share now that's not as common because for a hundred dollar share stock to be gapping up 60 70 percent i mean that's a huge gap at a high price for us like a two dollar stock opening at four dollars that's already a 100 gap so it happens a lot faster on lower price names and so what i do to begin with is i review the scan so if we pull this back up here the process of reviewing the gap scanner all right so um and these are some examples these are some case studies of uh of gappers that i traded this was um this was one forty thousand dollars on pixie uh so pixie on this day was the leading gapper it was gapping up 78 had a 300 000 share float which i'll explain in a second 1.8 million shares of volume and a catalyst related to covid so that was one of the ones i traded forty thousand dollars on pixie um another case study here mdgs on the morning scans leading gapper took some trades on that seven thousand dollars a pop second leading gapper so on this particular day the leading gapper had a float of 1.1 billion shares acb that's a very very large float so let's talk about that for a second the process of reviewing the gap scanner initially i looked at the percentage gap if our biggest gap around the day is only like five or eight percent then we don't really have anything that's super big so that's kind of disappointing usually i like to see something at least 20 percent if not higher why just as a quick tangent it's significant for me to even be approaching trading in this fashion i'm going to pull up some metrics here um again this isn't to like brag or anything like that i'm simply doing this to show you um why what i'm saying is credible so this is about 9.5 million dollars in gross profit and we're going to look at instrument down here and let's see so performance by instrument movement is uh the majority on stocks that are over 10 and performance by the instrument's opening gap so of 9 million 9.5 8.8 million is on a stock gapping up over two percent so i make the majority of my profits trading stocks that are gapping up that's why it's important if you're thinking about learning how to trade momentum that you understand how to use a gap scanner and how to trade gappers so the process of reviewing the scan begins uh initially just with looking at how big the gaps are and in this case we've got a couple of big gaps indp was the leader now i might already be familiar with that stock i can click on it and bring up some some more detailed info on it over at warriortrading.com you could also search right here and bring up info on it if you wanted to so we know we have news this morning 7 a.m and that's i suppose you could see the news uh if we go back over here the float is 1.6 million shares now this is uh important so if you haven't already watched any of my videos on float i have videos where i do a full definition of float and all the ways that float can change and everything else but just in very brief summary here just to save you the time uh float refers to the number of shares available to trade so when a company does an initial public offering they sell shares onto the open market and then from that point forward that becomes the float so if a company sells two million shares dollars a share they'll raise 10 million dollars in their ipo right and from that point forward there's 2 million shares available to trade so if you wanted to buy i guess the whole company you would buy 2 million shares now um there's that's not always exactly true because sometimes companies will have uh larger blocks of shares that are a different class so you wouldn't necessarily be able to buy the whole company by buying those two million but that's getting more detailed that is important what's important for right now is understanding that the float represents the level of supply so this is coming into a very simple supply demand equation if you have a stock that is in very hot demand as idnp uh indp was today then the low supply creates an imbalance and that's when you get a really big move in the stock price obviously on gamestop there was a huge imbalance between supply and demand the float on gamestop is a bit higher hey girl pull it together girl showing right now at 46 million shares but still relatively low compared to a company perhaps like uh bank of america which has 7.5 billion shares 7.5 billion shares remember 1 billion is a thousand millions so a company like indp is one seven thousandth as big in terms of its float as bank of america it's tiny itty-bitty company and this itty-bitty company how is it possible that it could go up so much i mean you wouldn't think that maybe it could because it's such a small company and it again comes back to supply and demand the shares of the stock are trading higher today on news there are not a whole lot of sellers on this stock and there are buyers and people are buying it and they're excited about it and this is the definition of momentum trading so the trading gappers i've i call it the gap and go strategy gap up go up now these stocks can be volatile in both directions a gap up is not a guarantee that they'll go higher mos y is an example of one today that did gap up and then sold off at the open so what's different about these two uh mos y was the fourth leading gap well both were worth keeping on watch and mos y was worth uh in fact even trading right through this area here as it was breaking new highs as it made new highs at the open it wasn't worth trading here until it broke over 680. so one of the setups that i like to trade is the break of the pre-market high so through the gap and go the full the full chapter in our classes i talk about um taking the first and second pullback and we have a bunch of examples of that we also have live trading archives then i've got um taking the break of the pre-market highs so this is the one that i'm looking at right now break at the pre-market high so in this case we didn't get a break of the pre-market high on mos y over on indp we did get a break at the pre-market high we got a pretty uh phenomenal break of the pre-market high is really spectacular right here okay so that that was the critical level that needed to break on mos y that didn't and i think the fact that we had something else that was so strong this became the one that was really in focus and you know there's only so many traders out there and they can only focus on so many stocks at the same time so ultimately whichever one is the best one becomes the one that people focus on and people are trading and so today that was indp all right so we start by looking at the gap scan we then uh check the stock to see that there is news sometimes we'll have a stock on the gap scan there's no news and that's a little confusing because we don't fully understand why it's gapping up so much however simply the fact that it's up becomes a bit of its own catalyst especially if it is one of the top five or ten leading gappers in the entire market so no news isn't necessarily a deal breaker i checked the volume today but not with a lot of focus on that more than anything i look at the chart and i look at the float if i see the float is 125 million shares or 89 million or 100 these are in white which is a way of me kind of disregarding them not not really usually going to be very interested in those stocks under 50 million is better under 25 is better under 10 is better under 5 is better the lower the float the more parabolic we see now it's not always true because gamestop was probably one of the most parabolic over a multi-day period but what's more common is that lower float stocks when they have a good catalyst have a sharp imbalance in supply and demand that results in a really big move so focusing on leading gapper and today this one had a 1.16 a 1.61 million share flow very low flow there are some more metrics here that we can look at but we're going to focus primarily on the percentage gap the price of the stock and the float i do typically trade lower price stocks a little bit better than higher price stocks when we start to get into the price range of gosh like over 50 that's when things can start to get a little sloppy for me i probably have some metrics here yeah so here we have some metrics um of profitability based on price so you know we start to get a little higher price and well gamestop kind of changed the metrics on that for me because i did really well on it but in any case i do better between five and well i guess you'd say between two and twenty would kind of be my sweet spot so generally anytime a stock is on the gap scanner and it's between two and 20. i'm gonna be pretty interested in it and so in the case of indp on the gap scanner moving up the chart looks good which means it's above the volume weight average price it's generally consolidating sideways and the logical breakout spot here based on setup number two break of the pre-market highs again i have a number of different setups that i trade this one also actually gave us a red to green move right here it dipped down and then broke out and we could also even call it an opening range breakout it was over 1250 and it ripped up to 1348 and got halted on a circuit breaker if you don't know what that is again that's something we talk about extensively in the classes you can check out some of my other videos on youtube if you want to look for it there anyways it gaps squeezes up halts opens higher dips down rips up to 15 and so we have a couple of nice trades here one is right here for the break at 1250 which was to anticipate the break through the pre-market high of 1286. alternatively an entry at 1286 would have been fine but a little extended on the one-minute chart it goes up to 1348 which is an opportunity either to take profit or to hold for a bigger move it goes up then to 14 18 dips down first one minute candle to make a new high right here the first pullback breakout up to 15. and that's back to setup number one even if you just took those two trades you do not want to overstay your welcome being a trader is not about taking 100 trades a day it's about managing your risk and if you can take a couple of trades one or two really good trades each day by focusing on high quality you're going to have a higher percentage of success if you focus on just you know kind of hitting trying to trade everything that's moving your accuracy is going to drop it's really not a good way to approach trading because every trade you take carries risk so the biggest way that i mitigate risk is by finding a strong stock to trade and it starts right here with gap scanner then i try to find the best entries and then i try to remind myself not to overstay my welcome to trade it as aggressively as i can but to know when to walk away today i was up 103 thousand dollars and i gave back about 15 000 off the top and that was my cue to walk away i gave back profit off the top i gave back 10 000 on this red candle right here right there and then i actually added back right here i made back the 10 000 i lost and then i lost 10 000 again right here at that point i said you know what i haven't made any money since right here maybe it's time to just throw in the towel and stop trading now we did end up having more opportunities later in the day on this later in the morning but not without some false breakouts and some choppiness so you know i'm sure there's people that traded all day long that made more than me i'm sure there's people who traded it all day long that made less than me it's not a competition to see how much you can make or how much you could lose if you can get green and you can shut it down you're actually going to be doing something that the majority of traders haven't figured out how to do consistently and it starts by knowing how to find strong stocks to trade and for me the gap scanner is the go-to place again just to emphasize i know you guys have you know there's a million play a million people out there talking about trading and trying to teach you things about trading one of the biggest challenges that i found when i was getting started is how to find credible information i want to learn just cut through all the nonsense all the bologna just get straight to credible valuable information that's got some you know proof that it actually works because a lot of people they talk a big game but then there's no proof you guys can see the broker statements on my website you can see that my profits are real and those are based on trading gapping stocks just like this the majority of the time and if you want to keep learning if you want to learn my whole strategy i am happy to teach it to you that's what i do over at warrior trading and you can check it out come over to worrytrain.com strategy again this is just an excerpt from chapter 7 of the warrior pro classes it's a short one a short excerpt because this is just by itself a fairly long chapter but i hope that it's been helpful i hope that uh it gets you guys pointed in the right direction and at the very least make sure you subscribe to the channel so when i post uh more helpful videos like this you'll be able to watch them as soon as they get posted all right so thank you guys for tuning in again if you want to learn more come over to warriortrading.com strategy and would love to have you join the classes and become a student because one of the things that's really hard is trying to piece it all together just by watching miscellaneous videos trading is hard it really is don't underestimate that all right thanks for tuning in i'll see you guys for the next episode and that right there was an entire video with no ads i don't monetize my youtube channel with video ads which means you guys get to enjoy the content but do me a favor please hit that subscribe button and give me a thumbs up and let youtube know that this channel is the channel to watch if you want to learn about day trading

Channel: Warrior Trading

Views: 23,727

Rating: 4.9064126 out of 5

Keywords: day trading, day trading strategies, trading strategies, how to day trade, beginner trading strategies, momentum day trading, stocks, trading, how to trade, stock trading, penny stocks, pdt rule, shares, float, volume, candles, profits, Wall St, finance, brokers, Ross Cameron, warrior trading, day trade warrior, gap and go

Id: 7RbjGk9eNJU

Length: 22min 32sec (1352 seconds)

Published: Mon Sep 20 2021