Learn to how to pick penny stocks using Equityfeed (realtime scans, LII and more)

[StockJock-e]

Any tradesperson would tell you that you need the right tools for the job. Trading or investing online is exactly the same, all you need are the right tools!

So what are these tools?

Before we get into the actual tools, you need a good understanding of the markets. This comes with understanding simple concepts like demand and supply, fundamentals and technicals. If you are a rookie to investing, I suggest you get comfortable with these terms before you read any further.

There is a technical analysis thread in this forum that can bring you up to speed.

Fundamentals are a bit deeper, but its all common sense. Things like share structure, sales and earnings are important to know, but if you are daytrading, you are more concerned with simple demand and supply at that exact moment in time.

Daytraders in penny stocks want to know three things - What is the share structure? How are the technicals? Is there momentum here?

Daytraders do not care about the earnings and future PE ratio of a stock they are buying at 10:34am and selling at 10:49am. All they care about are the buyers and sellers at that exact moment in time when they enter and exit the stock.

How is it done?

[StockJock-e]

I am assuming that you are familiar and comfortable with trading online, if you are reading this and wondering what a float is, or what broker you should use, then you should stop reading this thread, it is way beyond you.

Let us move ahead and take a look at some of the tools needed for stock picking momentum stocks in the world of OTCBB.

As a trader, you need a way to find stocks that are moving. You need what is called a 'scanner' or screener. As the name implies, it scans the OTCBB market for you.

What is it scanning for? You can set the scanner to find specific events or actions. It will then run a real time scan through the OTCBB and filter out the stocks which match your criteria.

For example, you have noticed that stocks that have a big increase in buying volume in the morning, compared to the previous day, tend to close higher at the end of the day. With this in mind, how about running a scan to find stocks which have a 500% increase in volume this morning, compared to all of yesterday.

In our example, we will be using the tools from equityfeed.

Here is the setup I have running on my desktop:



Stay tuned for a break down of what you are seeing and how to use it.

[StockJock-e]

On the top left I have whats called the 'top 400'. This is simply a screen, updated in real-time, that shows important trading activity that is occuring at that exact moment in time.

By clicking on the column headers, you can organize this list to show the stocks with the biggest spreads, %change, number of trades, biggest volume, $ volume leaders and so forth. This gives you a quick snapshot of whats moving and how much money is moving in or out of it. You can double click a stock symbol here which will then show up in the quote/chart montage on the top right.

The top 400 is a nice function, but the real important function in my opinion is the streaming filter.



The streamer allows you to set up filters which you then apply to the OTCBB markets, it will return the results to you in real-time.

There are endless combinations of filters you can apply, either together or individually. In this example I am just setting the filter to show me all stocks on the OTCBB that have volume now that is 500% greater than yesterday.

The reason I set the filter this way is that I am thinking that most penny stocks I see making big moves have a big spike in volume, the spike is generally a lot higher than the entire previous day, so if I could find a stock that is just getting a spike now, it might have a possible run. So I set my filter to find that, I could have also specified the a price range, the dollar volume and how close I want the stock to be to its 52wk high and low, but for the sake of this example, lets do it quick and dirty.



As you can see, the screaner has found over 249 stocks that have a 500% increase in volume today vs yesterday. If I applied from filters before the scan, for example, stocks trading between 10c and 20c, there would have been more focused results.

I scan the list quickly, I see DRGO has some nice volume going on there so I double click that row, DRGO now appears in the quote/chart area. I added my Level II to that screen for simplicity issues see we can see it all at once.

If you as a trader were looking for a fast moving momentum stock and ran this scan at 11:30, you would have caught those initial volume spikes in DRGO, if the chart looked good (check my tutorial on technical analysis) and level II showed the bids stacking up (see level II tutorial ..link coming soon), You could have taken a position at 10c. DRGO hit 14c later in the day, a nice 40% gain.

[StockJock-e]

By running different types of filters, you can specify and identify more characteristics of moving stocks.

We have a few different settings mentioned in our daytrading thread:
http://www.hotstockmarket.com/forums...ad.php?t=23194
and
http://www.hotstockmarket.com/forums...ad.php?t=23195

If you are interested in making serious money daytrading penny stocks, this is a must. A carpenter is only as good as his tools, and a penny stock trader is the same way. If you are serious about actively trading penny stocks, you need to spend money to make money.

Now you know the secret to finding these stocks, you do not need to be a genius or some financial whiz, its as easy as entering the right filter, point and click.

Be aware of the risks involved with penny stocks, these are by the far the most volatile securities on the market and may lose a large percentage of your money if you do not do your research before jumping into a stock, or fail to set a stop loss, mental or actual, when you get into a stock.

Microcaptrade is an HSM prefered partner. If you are interested in trying out this software, you as a valued HSM member can have the first month for free!. The normal price thereafter is $99.99, but as a member of HSM, you can get it for $79.95 by clicking the banner below.

(Edit: This promotion is over until further notice)



To clarify, MicrocapFeed has 3 trial subscription pricing plans:

TRADER: this is the ONLY trial period that is Free, although trial subscribers have to pay a $1 NASDAQ Exchange Fee.

PRO: this trial subscription is $19.95, this is to cover the NASDAQ Level 2 Exchange Fee.

ELITE: this trial subscription is $29.95, again this is to cover the NASDAQ Exchange Fee.

[mattman27]

very nice. i use filters to find stocks to watch but when the market opens the filters are closed and the eyes start watchin. mainly use technicals.

[mattman27]

Originally Posted by rider3160

I think the best screen is stockfetcher by far. I filter everything and for the money you cant beat it. I get free L2 with ameritrade and free news with them as well. all you need is a filter and you will be set and at only $9 a month it is worth it.

why doesnt HSM get an account? everyone can pay $10 once and that should cover the cost for a while. then just share the account... would that be possible?

[crazyTrader]

Thanks for the INFO Stockjock. Very informational and helpful. I use stockcharts at the moment. Would love to upgrade eventually.

[whozurdaddy]

anyone have experience with both programs? with the exception of L2 and news, is there really that huge of a difference between the two? (not taking into account that by using a brokers L2 you have to switch screens if your resolution isn't adjusted accordingly)

[iiiqqqeg]

to add something ... when using any filter with microcap look for reclimb 100% because it means the high of the day .... which is really what u want

[ripple]

Originally Posted by mattman27

why doesn't HSM get an account? everyone can pay $10 once and that should cover the cost for a while. then just share the account... would that be possible?

Matt, no that would never fly, but at only +/- $100 a year, it is a great buy!!!