Description
This Day Trading Strategy aims at seeking daily positive returns from long/short positions in stocks based on large price movements that are accompanied by breakouts in volume.
Stock Screening
The strategy focuses on the Energy, Healthcare, Financial and Technology sectors and performs an initial scan of the entire stock universe within these industries based on the following criteria:
Price: 5$ < p < 50$
Average Daily Volume: > 1,000,000 shares
Market Cap: < $10Bn
This currently results in approximately 250 stocks out of which only a few will be in focus for the day, primarily based on before the open news, announcements, results reporting or analyst upgrade/downgrade/initiation. Then 5min charts are opened for the main 20 stocks âin the newsâ and these are monitored throughout the day.
Money Management
Position size is capped individually at 10% of buying power. The number of stocks is determined based on the price level and this rule.
Risk Management
A protective Stop Loss is placed upon entry at a level which signifies a change in direction, i.e. previous highs/lows are used to determine this price level. If the price moves in our direction a magnitude which equals the delta between entry and the stop loss level, the latter is moved to break-even.
Entry Signals
The entry signal is given by a break in any given period of the 100 period Simple Moving Average of the stocksâs volume.

Exit Signals
As soon as the stop loss is placed, which determines the exit at a loss level, the delta from entry to stop loss is multiplied times 2 to determine the exit level at a profit. In other words, a 2x1 ratio is used to determine automatic exit at a profit. As mentioned in the risk management section, if the stop loss is moved towards break-even, an exit at this level may occur. Finally, a manual exit may take place if the trend abruptly changes direction supported by volume size similar to the one present at entry conditions.
Big Rules
- Trades are never placed before 9:45 a.m.
- All positions are closed end of day independently of their status
- Strong price AND strong volume movement must be present to activate a trade. Price moves without volume or volume spikes without price movement are ignored.
- Manual trend lines are used/drawn to aid potential manual exit.
- If there is a strong general market momentum, no trades are entered in the opposite directions, i.e. if there is a strong downtrend and negative momentum in the market, no long trades are entered
- No Tops or Bottoms are called.
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This Day Trading Strategy aims at seeking daily positive returns from long/short positions in stocks based on large price movements that are accompanied by breakouts in volume.
Stock Screening
The strategy focuses on the Energy, Healthcare, Financial and Technology sectors and performs an initial scan of the entire stock universe within these industries based on the following criteria:
Price: 5$ < p < 50$
Average Daily Volume: > 1,000,000 shares
Market Cap: < $10Bn
This currently results in approximately 250 stocks out of which only a few will be in focus for the day, primarily based on before the open news, announcements, results reporting or analyst upgrade/downgrade/initiation. Then 5min charts are opened for the main 20 stocks âin the newsâ and these are monitored throughout the day.
Money Management
Position size is capped individually at 10% of buying power. The number of stocks is determined based on the price level and this rule.
Risk Management
A protective Stop Loss is placed upon entry at a level which signifies a change in direction, i.e. previous highs/lows are used to determine this price level. If the price moves in our direction a magnitude which equals the delta between entry and the stop loss level, the latter is moved to break-even.
Entry Signals
The entry signal is given by a break in any given period of the 100 period Simple Moving Average of the stocksâs volume.

Exit Signals
As soon as the stop loss is placed, which determines the exit at a loss level, the delta from entry to stop loss is multiplied times 2 to determine the exit level at a profit. In other words, a 2x1 ratio is used to determine automatic exit at a profit. As mentioned in the risk management section, if the stop loss is moved towards break-even, an exit at this level may occur. Finally, a manual exit may take place if the trend abruptly changes direction supported by volume size similar to the one present at entry conditions.
Big Rules
- Trades are never placed before 9:45 a.m.
- All positions are closed end of day independently of their status
- Strong price AND strong volume movement must be present to activate a trade. Price moves without volume or volume spikes without price movement are ignored.
- Manual trend lines are used/drawn to aid potential manual exit.
- If there is a strong general market momentum, no trades are entered in the opposite directions, i.e. if there is a strong downtrend and negative momentum in the market, no long trades are entered
- No Tops or Bottoms are called.
J