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How to make a Premarket Watchlist? Make a Trading Plan for Day Trading Beginners

 I’m going to walk you step by step how I create my premarket watchlist every single

morning. And these 5 steps are...
Warning: There is no Lambos here, no getting rich quick, and no trading secrets that’ll
cost you $5000. I know, you’all must be really disappointed. So I guess I will have
to actually give you real, no BS valuable information on day trading now.
So if you’re a long time viewer of this channel, you know that I've always preached
to plan for your trades and trade your plan. I didn't make that line up btw, I think I
stole it from Confucious or something. Yeah, we’re related, somehow im sure.
I’ve found that in trading one of the most important aspects is focus. Its way too easy
to get sidetracked by chat room alerts, what people are saying about a ticker on Twitter
or Stocktwits, or even the intraday alerts from your own momentum scanners.
And unfortunately, thats the biggest reason most beginner traders blow up thier accounts,
or slowly bleed it out with small paper cuts here and there. Im saying all that because
I understand, I had done exactly that myself.
Now I spend about 2.5 hours every morning before the market opens to prepare for my
watchlist. But don’t worry, this video isn’t gona be 2.5 hrs.
I have condensed my watchlist planning process into 5 simple steps. Note that I said simple,
but not easy. Trading is never easy, but you can greatly increase your success rate by
having a plan. And all it’s costing you, is a simple tap on the like button!
So my first step to creating a premarket watchlist is scanning for gappers. And why gappers specifically?
Gappers or gap ups or gap downs, are stocks that have moved a drasmtica percentage technically
overnight. It could be because of earnings, clinical trials, or other headlines such as
deals, agreements etc.
Another importance of trading gappers is. there is going to be an immediate reaction
to that gap up or gap down really fast at then open. And as day traders that's exactly
what we are looking for. We want momentum, volume and volatility.
So how I there are several ways I scan for premarket gappers. The first one is Benzinga
Pro, which I have made a video already telling you how I set it up. I use the Movers module
to scan for both large cap and small cap gappers.
I also use Trade Ideas to scan for premarket gappers. Sometimes both of these scanners
will give me a list of similar potentials runner. But I will be going over why I chose
to use both scanners specifically in the next few steps.
A third source I use for finding gappers premarket is Briefing. This is a great tool for scanning
specifically for non penny stocks. Briefing is a web based service that provides you live
market commentary and analysis.
I will also talk about this in the next step. But basically Briefing provides me a summary
of the none penny stock gappers. The penny stocks have been really hot lately, so I havent
used Briefing as much. But this was extremely handy in the summer months when the low floats
are really slow.
The fourth resource I use to scan for gappers is with DAS trader my execution platform.
They give me a list of the gap ups and gap downs called the Top List. This feature came
with the platform subscription.
The fifth way to scan for gappers is finally free to use, but I personally havent used
it in years, which is the Thinkorswim premarket scanner. I used to use it but it doesnt refresh
as fast as the other tools i mentioned earlier. I used to miss all sorts of premarket moves
because the scanner was delayed. But i mean its free after all its still a good way to
get started as a beginner trader. I showed how to set up the scanner in my thinkorswim
tutorial video.
It doesn't matter how you find your gappers, either with the five methods I mentioned or
you got it from a service you subscribe to like a chat room or an email. It doesn't matter,
what matters more is that you do your own research on the news catalyst. Which is the
second step to building your watchlist.
Because not all gappers are created equal, some press release will generate more hype
and follow through, while others are just blatant pumps that won’t last. But the key
is knowing that there is, one, an actual news headline published on reliable sources like
Benzinga, finviz or yahoo finance.
And why is a published news headline so important? If you remember stocks in recent years like
DRYS, DGLY, and LFIN, those stocks were halted on T-12. These stocks were halted by the Nasdaq
exchange for several days, weeks, and even months, because you haven't smashed the like
As always, these videos really take me 10-12 hours to make. That's the time I could have
spent driving my lambos, chilling on the beach, and making millions on the toilet. So if you
don't mind, taking one second to drop the like button. I’d really appreciate it my
So the reason stocks I mentioned liek DRYS, DGLY, and LFIN were halted on a T-12 halt,
is because the Nasdaq is requiring additional information from the listed company, usually
thats after these low float stock is making volatile 300, 500- 1000% moves with no valid
The intention of the T-12 halt by the Nasdaq is to protect investors from companies that
are potentially violating federal securities laws. Whether thats true or not, we’re not
gona get into that today.
And that's why knowing there is a valid new source is so important. If you were stuck
in a T-12 halt, your funds could be tied up for days, weeks or even months. This is not
the same as the T5 volatility halt we usually have when the stock moves more than 10% within
5 min nooo.
Imagine if you were using margin. I have known some trader friends who were short LFIN into
the halt around $24, and had to keep wiring money to their brokers throughout the next
few weeks because he was short too big of a position with margin. And yeah even though
he made a killing after the stock unhalted at like $7.
But that emotional stress for almost 2 months, and the unknown of how long he would have
to keep wiring money in for was just not worth it. If you want to learn more about all the
different kinds of Nasdaq trading halts, i'll leave a link for you to read more below.
So now we’ve established the importantce of news, it doesnt mean you should go buy
every gapper with news blindly and make quick easy money.
If you’re following chat alerts to buy breakouts on every gapper that has news… i have some
breaking news for you. You might get dumped on, if you do not analyze the news
There are generally three different tools I use for news research, Benzinga, Brieifng,
and finviz.
Using finviz is perfectly fine to get started, but I use Benzinga because they are lightning
fast and provide me the most complete information including updates on halts and the above average
trading volume. without no delay.
Briefing is my news source for real mid cap and large companies. THis is where I can get
a summary of their earnings reports, upgrades or downgrades, or other major news headlines
summarized briefly so it saves me so much time just like Benzinga.
So after seeing the news, we have to analyze it. Generally speaking, I categorize the pr
into 3 categories. Now what the true significance of these headlines for each particular stock
will obviously be different, and of course depending on whether the company is a penny
stock or a real mid cap and large cap stock.
The first category is obviously positive, this can be potential deals, good earnings,
positive biotech drug trials, potential buyouts, global trade news favoring a specific sector.
For example, SORL was a small cap stock with news of a potential merger agreement. Now
if you just briefly read the headline on Finviz, you would have missed the key price of potential
$4.72 conversion price listed here on Benzinga.
The transaction was going to be in cash $4.72 for each share of common stock. Which is important
when trading merger news headlines. Yes, the news is positive, but unless you know the
exact share price and unless that price is significantly higher, that's not going to
move the stock.
The second category is obviously negative news, this can be a fallout of a deal, global
economic or environmental crisis, or the stock is issuing an offering or getting delisted
by the stock exchange, which we have seen happen very often with small cap penny stocks.
For example when SLDB, a small cap biotech drug company had one of their drug trials
were put on hold by the FDA. thats extremely bearish news and the stock gapped down overnight
and continued selling off slowly on Nov 12.
Now the third category of news is fluff news, that are disguised as positive. This is extremely
important to recognize when you are trading small cap penny stocks. A lot of these companies
use optimistic wording in their PR headlines to pump their share prices up.
There are a few key words that can potentially be a sign of a fluff news. Again, this method
is going to vary for each individual basis of course, the market sentiment, and is to
be used as a general guide only.
Some common pump keywords are like “potential deal” , “engagement”, “optimistic
outlook”, “in the talks”, “possible partnership”. Anything along in that grey
area of something that could happen, but it also might not happen.
Its kinda like when you buy a DVD that could potentially make you millions, but you might
have to lose $50 to a hundred thousand in order to get there. Technically the potential
is there. Just like technically it could start raining Lambos tomorrow too, its theoretically
Sometimes these news are even a few days or a few weeks old and they just recycled it
or reworded it as brand new like one of my favorite pump stocks $CANF here.
Theoretically speaking, positive news in a perfect world should create a momentum to
the upside. And vice versa if the PR is negative the stock should dump right? Well, nothing
is guaranteed 100% in day trading.
We have seen stocks with blatant pump PR running 200-300%, and also stock with amazing earnings,
selling off the entire gap. Gappers with news doesn’t guarantee a follow through to the
most obvious direction upside or downside.
We also need to look at key statistics of the stock, whether the stock is a recent reverse
split, how it’s setting up technically speaking, and using past screen time and experience
to create educated guesses.
And that's the importance of the next three steps. In part two of this how to create a
premarket watchlist video we’ll be putting all these steps together. I know it sounds
hard, and it doesn't sound like you can make $1 million dollars in 6 months.
But hey, this is the truth. No Lambos here, only the reality. Trading can be simplified
into specific steps, but its never easy. And again if planning is too much work then maybe
following alerts better.
This video really took a long time to make. If you want to see a part two of this detailed
step by step guide to creating a premarket watchlist, let me know in the comments below