Today, you’ll learn how to find intraday trending stocks.
As a general rule, anyone can find intraday trending stocks by using Amibroker or other trading software, understand order flow, and learn about commercial buyers and sellers.
- Open High Low Strategy
- Order Flow
- Commercial Buyers and Sellers
Most people do not use lower timeframes for their advantage because they believe it is too volatile.
It is not true because Market Makers use it all the time. They always follow liquidity that they need to make money.
Professional traders know what is order flow that makes their trading easy.
Well, traders can use the intraday charts in the stock markets to find low-risk trade entries.
The trader should watch the order flow in the one-minute chart to determine the trend.
There is also a popular strategy that day traders call it the “Open High low Strategy”. They buy the stock when the open is equal to low in the first 15 minute candle of the day.
Likewise, they will sell the stock when open is equal to the high.
One should backtest this strategy in Amibroker to see if it is reliable.
Traders can also use Order Flow to mimic market makers or banks.
When Johndeo started trading, he had studied how the bank traders trade because he knows it is easier.
Trading with Market Makers is a strategy that moves with the liquidity providers.
It is a strategy that looks for commercial buyers and sellers. Professional traders call it trading with the flow or MOMO trade.
Liquidity hunting is better than trying to predict the market highs and lows because nobody can do that perfectly all the time.
This strategy is the real trend following technique.
Well, most traders who have mastered this technique can use it any time frame because the market is fractal.
There are also Commercial Buyers/Sellers who control the top and bottom of the stock markets.
Anyone who has large enough trading accountant size makes the market move.
Although Johndeo’s favorite strategy is Order Flow, he also enjoys trading with the Commercials.
However, most of the time, his trading is more geared towards his preferred method.
People should understand that there are different strategies in stock trading. Choosing one is very important.
In this post, there are three strategies that anyone can use to find intraday trending stocks.
Open High Low Strategy
The first 15-minute candle is very important in this strategy. Traders can agree that when the low is equal to open, it shows strength of the stock.
One can also use the first 30-minute candle at the chart for which traders can determine the signal.
This bullish price action is easy to identify with Amibroker that is connected to real-time data. But, if data services are not available, anyone can use broker’s data manually.
How to scan for trending stocks?
Traders often use free and paid trading tools to scan for trending stocks. Free tools are usually not reliable. However, tools such as Amibroker, Meta Stock, and TradingView can assist traders to finding such stocks.
Traders only need to know how to find them.
Well, the Amibroker script below can screen thousands of stocks in the market faster to help the trader execute the strategy.
Filter=open=low or open=high;
Some traders would close the positions that had gains before the close of the day. Well, it is recommended to hold the stocks until the next day to follow the strength of the trend.
However, one should backtest this strategy that works 80% of the time because it might not work in the market he is trading.
Well, there is a strong warning against buying or selling immediately.
Experienced traders would always look for the rate of the current move.
For example, they would avoid stocks that have moved over seven percent already. Instead, they wait for a retracement to four to five percent when they wanted to take positions.
One should avoid the highs and lows to reduce the risk in trading.
A trader can find an intraday trend in the stock market when he uses order flow.
It is not what most people think. There is a lot of miss information online about how order flow works.
Well, most of the websites out there mislead the readers about what’s real.
One can see what’s wrong with this setup:
Would the banks risk their money with this moving average indicator?
They would avoid risk at all costs by only by chasing liquidity in the market.
How to read order flow , without access to Sierra Charts, Bookmark, etc?
Well, anyone can use the one-minute charts and volume.
How to see stock trends?
As a general rule, to see stock trends, traders can look at the level of two buyers and sellers.
The illustration below will change the trader’s view of the market.
A trader would go to New York because there are more people in there. Why would he go to Chicago when there is no business in there?
Liquidity providers use volume to make money from Commercial Buyers and Sellers.
How can a small trader profit from this simple strategy?
Well, one can trade against volume until there is nothing left.
The volume must be visible enough in the chart.
Johndeo recommends order flow tools for serious traders. He uses Amibroker and Sierra Chart for trading.
New York and Chicago represent limit orders from large commercial traders.
If one cannot understand the concepts here, he needs to read it again.
There are also fake orders that traders need to watch out.
Commercial Buyers or Sellers
If market makers provide liquidity, commercial buyers and sellers are the reasons that the market exists.
Is it easier to trade within support and resistance levels? Or, is it better to provide liquidity?
People could think for themselves first. Instead of trying to predict support and resistance levels, one can trade toward highest volume on the period.
The commercial buyers and sellers are the highest volume in the chart.
In order for the Market Makers to make money, they have to provide liquidity.
Anyone can follow them to trade correctly.
Finding the trend: Bonus
How to find trending stocks for intraday?
An advance method to find trending stocks for intraday is to look at stocks that are up or down 20% from the previous day. These stocks have trend continuation patterns which traders can capitalize.
For example, a stock that is up 20% from the previous day usually continues its up move.
However, if the market is weak at the open of the market, traders can sell the stock immediately.
Because patterns exist on these types of market environment, it is important to record the behavior of the stock.
For example, what happened after 30 minutes from the opening of the stock market are patterns that can offer trading opportunities.
These patterns may change, and if recorded, can help traders predict the probability of the intraday direction.
To find intraday trending stocks, traders can follow the market makers.
Unless one has a trading account as large as commercial buyers or sellers, he can provide liquidity liquidity.
The trend will always move towards liquidity areas in the chart. Volume is the greatest indicator of liquidity.