My Stock Selection Process & Criteria

How I Developed My System

I was incredibly frustrated after hitting rock bottom early in my trading career. While
I had some good winning trades, my losing trades kept me from being able to make
a profit.

Finally, I stepped back and analyzed all my trades to see if I could make any sense
of it all.

After going through trade by trade, I was surprised and relieved to see that all of my
winning trades had similar characteristics. I focused on finding stocks that met
those criteria and only traded those.
Things turned around, and to this day, over ten years later, I’m still using these same
criteria. This system has helped me generate over $10,000,000 in day trading
profits.

You can view my audited broker statements here: https://www.warriortrading.com/

ross-camerons-verified-day-trading-earnings/.

As a reminder, my results are not typical. We do not track the typical results of past
or current customers.

My Stock Selection Criteria

Now that I knew what types of trades were working for me - and which were not I
needed to document what I was looking for and be really specific about it.

I’m sharing these criteria with you on the next page. After using different scanning
software for years, I saw an opportunity to make it so much easier and smoother for
day traders like myself to access customized scanners by developing them myself.
With my very own tech team, we’ve been offering our beloved day trading scanners
since 2020. You can learn more about how to subscribe to them here: https://
www.warriortrading.com/scanners/
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 Based on my own metrics, I created a detailed set of criteria for the right type of
stocks to day trade.

1. The first set of criteria is 5x Relative Volume. Relative Volume is a calculation

of the average volume a stock experiences. Typically, Relative Volume is
calculated by taking the average volume over a 30-day period. If for example,
a stock is trading with an average daily volume of 100,000 shares over 30
days, then today has 1 million shares of volume, the Relative Volume Ratio
would be 10. At a minimum, my metrics showed me I needed stocks to have at
least a Relative Volume Ratio of 5.

2. The second requirement is that a stock is already up 10%. You probably

already know this about me, but when I began trading, I had a small account. I
couldn’t afford to waste time buying a stock and hoping it would go up in a
few days. I had to use my limited capital carefully by trading stocks I already
knew were moving. If you’ve ever watched me trade, you already know that I’ll
never buy a stock that’s not already moving. It needs to already show signs of
strength in order for me to have any interest. At a minimum, I need a stock to
be up at least 10% on the day. The only exception to this is if the stock made a
really big move on the previous day, and is still holding those prices. This is
called a continuation setup.

3. Third, I always prefer a catalyst. The catalyst is the reason the stock is moving
higher. While it’s possible for a stock to move up without a clear fundamental
catalyst, my best trades are when the catalyst is obvious. This means the
stock generally will have breaking news that causes the stock to begin moving
higher. I don’t have a strong preference towards exactly what the news is, but
there must be a headline that justifies why the stock is moving.

4. I’ve found I have the most success on stocks priced between $1.00 and
$20.00, and I think that’s because this price range is generally the most
popular among retail traders with relatively small accounts. Most of us can’t
afford to buy stocks like Nvidia or Tesla, and as a result focus on the lower-
priced, but highly volatile, small-cap stocks.

5. The 4 requirements above all relate to characteristics of high demand. The 5th
requirement relates to supply. The float is a term used to describe the number
of shares available to trade. When a company makes its Initial Public Offering
IPO they sell a fixed number of shares onto the market. From that point
forward, those shares are known as the float, and they represent the supply.
Companies with less supply will tend to experience more dramatic imbalances
between supply and demand. These imbalances are what create 50% 100%
intraday moves. This is what active traders look for.

Stock Scanners
The stock scanners I’ve developed make the process of finding stocks that meet my
criteria simple. Since the software searches the market in real-time for stocks that
fit my strategy, the only thing I need to do is review the results. I typically focus on
the top 2 3 leading percentage gainers each day, as these will be the most obvious.
If a stock is obvious, that means more traders will see it, more people will recognize
the patterns, and we typically will see better follow-through.
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$AVTX is the leading percentage gainer on this day up over 422% on 15 million
shares of volume. It has a Relative Volume Ratio of 1,108.33. The price is slightly
higher than my preference but it is the obvious stock and I choose to trade it.

I always check the news catalyst before taking a trade so I can understand why it’s
moving higher.
 Then I analyze the daily chart. In this case, the stock had been selling off for a long
time and this is what I’d call a turnaround story. My entries are very close to the all-
time lows which helps me establish lower risk.

I always focus on managing risk based on a 2 1 Profit to Loss ratio. That means my
potential profit should be twice the size of my potential loss.
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Where I Buy & Sell

I rely on a combination of traditional candlestick chart patterns and technical

indicators to establish the lowest risk entries with the most upside potential. I
discuss these extensively in my free class where I also have dozens of examples of
how these trades played out. To keep learning, you can register here for the free
class offered on my website: https://www.warriortrading.com/free-day-trading-
class/

Disclaimer
My results are not typical. We do not track the typical results of past or current
customers. As a provider of trading tools and educational courses, we do not have
access to the personal trading accounts or brokerage statements of our customers.
As a result, we have no reason to believe our customers perform better or worse
than traders as a whole.

Read our full disclaimer here: https://www.warriortrading.com/disclaimer/