Premarket trading: Gaps & Breakouts before 9:30

[KCalhoun]

Do you trade stocks or ETFs premkt? If so, any lessons learned?

Mine:

• Scan for top 3-4 highest volume premkt gaps
• Trade minor gap continuations, especially small caps, on bullish cup breakouts
• Avoid buying inverse ETFs gapping up because they often reverse

Biggest challenge is all orders need to be manually entered limit orders so I can't automatically trail stops in fidelity premkt

 

[murray t turtle]

Do you trade stocks or ETFs premkt? If so, any lessons learned?

Mine:

• Scan for top 3-4 highest volume premkt gaps
• Trade minor gap continuations, especially small caps, on bullish cup breakouts
• Avoid buying inverse ETFs gapping up because they often reverse

Biggest challenge is all orders need to be manually entered limit orders so I can't automatically trail stops in fidelity premkt

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I like to see pre-market/postmarked price; but seldom trade then.
Some low volume tech etfs don't really have much of a change/ so I use qqq/tqqq………...…………………………………………………………………………………………………………………………..

 

[GrowleyMonster]

I don't think I have ever bought in the premarket. I have sold in the premarket after holding overnight. One of my best all time trades I made $2600 selling BYND after it gapped up. A half hour later it was in decline and by the bell it was down about $15 so I was pretty happy and very glad I had very liberal trading hours at the time, something I am missing right now but will soon fix.

I have often been tempted to buy after a gap down, if the 6 hour and one day candles show a nice up trend. At some point in the morning it is likely to retrace the gap. Haven't done it yet. There is a lot of potential in opening positions in the premarket but I only use the premarket as a time to sell overnight holds before the thundering herd wakes up and smells the coffee and sells off in unison.

 

[KCalhoun]

I don't think I have ever bought in the premarket. I have sold in the premarket after holding overnight. One of my best all time trades I made $2600 selling BYND after it gapped up. A half hour later it was in decline and by the bell it was down about $15 so I was pretty happy and very glad I had very liberal trading hours at the time, something I am missing right now but will soon fix.

I have often been tempted to buy after a gap down, if the 6 hour and one day candles show a nice up trend. At some point in the morning it is likely to retrace the gap. Haven't done it yet. There is a lot of potential in opening positions in the premarket but I only use the premarket as a time to sell overnight holds before the thundering herd wakes up and smells the coffee and sells off in unison.

Outstanding points, agree. My biggest winning swingtrades have often been selling premkt gaps up as well.

 

[GrowleyMonster]

This morning's downgap of TQQQ overnight is exactly what I was talking about. Wow... +11% from the dip. It was like an escalator. Nobody could have screwed that up and not made good money. I stayed out because the plan was to stay out and I don't have premarket trading with current broker, anyway. TBH I thought it would go back down to $110 but it just kept going up.

 

[GotherL]

Trading smallcaps in premarket is just too risky. Spreads are large and movements are erractic. Plenty of weak hands turning dips into panic selling or form V shapes. A lot of traders are chasing stocks on news only for it to dump or make huge dips to scare them out of their mental stops.

It's a dangerous game as there is a lot of manipulation in this timeframe for the chatroom pumps. Only they know exactly when to enter or exit. They can take the stock from $1 to $5, then back to $1, before taking it up to $10 again. They can even drop a stock on great news or take a stock to the moon on terrible news. I've witnessed it so many times. You are an underdog if you're trading in premarket. Unless, your super familiar with the games they play you may have a slight advantage at best.

There are some really good opportunities but the downside risk is just not worth it for the typical daytrader. You need a precise plan and know the patterns of these p&d's. If you just chase anything that hits your scanners or morning toplist on fomo you will likely blow your account very fast.

 

[KCalhoun]

Trading smallcaps in premarket is just too risky. Spreads are large and movements are erractic. Plenty of weak hands turning dips into panic selling or form V shapes. A lot of traders are chasing stocks on news only for it to dump or make huge dips to scare them out of their mental stops.

It's a dangerous game as only the chatroom pumps know exactly when to enter or exit. They can take the stock from $1 to $5, then back to $1, before taking it up to $10. And if you were caught on the top or trying to buy the dip inbetween you just screwed yourself of a lot of money.

There are some really good opportunities but the downside risk is just not worth it for the typical daytrader. You need a precise plan and not get caught up by fomo. If you just trade anything that hits your scanners or morning toplist you will likely blow your account very fast.

Completely agree, also the under-$10 stocks frequently get cb halts in-market. My favorite daytrading stocks are $20-$40/share like TWTR today, with high volume.

 

[murray t turtle]

Completely agree, also the under-$10 stocks frequently get cb halts in-market. My favorite daytrading stocks are $20-$40/share like TWTR today, with high volume.

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Good call on spxl last week;
spyX3/upro was over 44.44.They sold it today/LOL QQQ looks strong for the week/don't know about today...………….……………………………………………………………………………………………………………….

 

[KCalhoun]

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Good call on spxl last week;
spyX3/upro was over 44.44.They sold it today/LOL QQQ looks strong for the week/don't know about today...………….……………………………………………………………………………………………………………….

True... today gap n crap so far in S&P: oil's up UCO OXY, bounces UVXY TZA a bit

 

[murray t turtle]

True... today gap n crap so far in S&P: oil's up UCO OXY, bounces UVXY TZA a bit

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Some of these tech etfs are still above 444 moving average; but I canceled my ebiz etf buy order- that's life...….………………………………………………………..Closer we get to sept sells maybe tze trends better ?? Planned to close upro//$52, but I hate to sell a long fast/LOL/its related to spxl/spyx3