Day Trading Gappers Lecture

Introduction

• Topic: Finding stocks to trade, specifically day trading gappers.
• Challenge: Thousands of stocks available, challenging to find credible and useful information.
• Focus: Trading gappers, a strategy taught in Warrior Trading's courses.
• Disclaimer: Trading is risky; results aren't typical.

Strategy Overview: Gap and Go Trading

• Gap Scanners: Tools to identify stocks with significant price changes (gaps) from the previous day.
• Example: A stock up 225%, traded on the NASDAQ, with 111 million shares of volume.
• Definition: A stock gaps up when it opens at a higher price than it closed the previous day.
• Volume and News: High volume often due to breaking news; news can be a catalyst for gapping.

Trading Approach

• Technical over Fundamental: Focuses on technical analysis rather than dissecting news quality.
• Key Metrics:
  • Percentage Gap: Look for significant gaps (e.g., 20% or higher).
  • Float: Number of shares available to trade; lower float can lead to more volatile price movements.
  • Volume: Check relative volume to gauge interest.
  • Chart Analysis: Look for clean setups, moving averages, and volume-weighted average prices.

Tools and Software

• Custom Software: Scans the stock market for gapping stocks.
• Gap Scanner: Lists leading gappers, sorted by those with significant price changes.
• Criteria: Stocks up at least 5% are considered; also consider those down more than 5%.

Successful Case Studies

• Examples of Successful Trades:
  • Pixie: $40,000 profit, 78% gap, low float.
  • MDGS: $7,000 profit, leading gapper.
  • APOP: Second leading gapper on that day.
• Review Process: Check percentage gap, stock price, and float.
  • Focus on Lower Float: Prefer under 50 million shares, ideally under 10 million.

Trading Techniques

• Setups:
  • Break of Pre-market Highs: Important level to watch for potential entry.
  • First and Second Pullback: Look for continuation of momentum.
  • Red to Green Move: A reversal setup.
• Risk Management: Focus on quality trades rather than quantity; know when to walk away.

Lessons and Conclusion

• Importance of Gap Scanners: Vital tool for identifying strong stocks to trade.
• Learning and Credibility: Emphasize learning from credible sources with proven track records.
• Additional Learning: Encourages joining Warrior Trading classes for comprehensive education.
• Reminder: Trading is challenging and requires continuous learning and adaptation.

Call to Action

• Subscribe: Encourages viewers to subscribe for more content.
• Join Classes: Invitation to join Warrior Trading for deeper learning and strategy development.