Day Trading Patterns

Pre market breakout long pattern strategy for penny stocks

  1. Preferred stock price range $1 – $10
  2. Pre-market volume over 100k
  3. Stock on first green day
  4. Ideal criteria should be between 20 – 50 % gain
  5. The lower the float the better chance of a breakout
  6. Check stock history, the best case scenario is when it has no previous breakouts. If it had previous breakouts then check that volume is between 4 million to 40 million
  7. Check if stock has warrants issued, if it does, don’t trade it as there is high chance news can be used to spike up stock and to be sold shortly thereafter
  8. Stock has to be premarket consolidating not inside breakout
  9. Almost any good news is good catalyst for penny stocks, especially mergers, contracts awards and fundings
  10. Don’t trade a stock with less a 1million stocks traded per day*. Illiquid.
  11. If focus on best setup, no need for level 2.