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Finding An Edge Intraday

The document outlines the creation of a database and playbook for intraday long trading setups, aimed at helping traders find an edge in the markets. It emphasizes the importance of filtering stocks based on specific metrics, such as float size and pre-market volume, to identify patterns and improve trading strategies. The author encourages curiosity and continuous learning to refine the database and enhance trading effectiveness.

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Nitin Lama
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90 views8 pages

Finding An Edge Intraday

The document outlines the creation of a database and playbook for intraday long trading setups, aimed at helping traders find an edge in the markets. It emphasizes the importance of filtering stocks based on specific metrics, such as float size and pre-market volume, to identify patterns and improve trading strategies. The author encourages curiosity and continuous learning to refine the database and enhance trading effectiveness.

Uploaded by

Nitin Lama
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Finding an Edge: Database & Playbook Creatio

- Morning Intraday Long Setup


A way to exponentially learn new trading setups without trading live...
F4VS

DEC 20, 2024 ∙ PAID

3 1 Sh

The goal of every post is to bring value to the reader while also improving my
understanding of the markets.

As I study intraday setups, I thought it would be good to share the data that I have
been collecting on intraday-long setups. First, let’s get into the…
If you are just here for the database → Scroll to the bottom of the post

Purpose of Creating a Database/


Playbook:
Finding an edge in the markets! That’s really what it comes down to. The elusive
“edge” that all traders dream of.

As a new trader, one of the hardest things to do is figure out what to do and not do
incredibly hard to sort out what is noise vs. relevant information. One solution for
is screen time. Sitting in front of charts. However, the market is only open for a
limited time and even then you aren’t able to see every pattern or chart that may lo
interesting (or even know what is of interest to begin with).

This is why creating a database of a type of setup that has occurred in the past is s
important. By tracking past setups that have the same characteristics over time, yo
are able to extract an edge (hopefully).

A quick overview of what this process is:

A crude drawing of the process…!

1. Take an idea you have (ie. stock gaps up on a news catalyst and continues to m
higher highs in the morning) and find tickers in the past that have behaved in
manner.

2. Filter out these tickers by metrics you find relevant.

a. For example, I want tickers with many eyeballs on them so a pre-market


volume threshold should be used.
3. Ask questions about this data to extract edge

a. For example, one might ask whether the gapped-up stock has a history of
holding gap-ups because most stocks will gap-up on news and crash
throughout the day. Does each ticker you track have a history of this type
behavior? If the vast majority of these tickers in your database show a hist
of holding previous gap-ups, well well well, you have gained a small edge.

The more of these questions you answer, the greater your edge will become. And t
will be the framework of what a working setup will look like!

Let’s get into the…

Filtered Metrics for the Database:

These 4 metrics are what I used to filter out the 1000s of stocks (for this intraday
morning long setup) that have made similar moves. Each filter should have a reaso
being there. This list is also a work in progress. Remember, we don’t know what w
don’t know as traders, and because of that, you may read a trading book or consum
content online which may alter your filters. These filters are not concrete. The
ultimate goal is to be curious. Curiosity breeds an edge.

Reasoning Behind the Filters:


1. Float is <100M, excluding OTC markets
a. The lower the float, the higher the probability the stock will make explosiv
moves.

2. AfterHours & PreMarket Volume is >1M

a. More premarket volume means narrow spreads (less slippage), more price
movement, and cleaner price action.

3. Gap up >20%

a. Similar to the volume filter.

4. Breaks PM Highs by 11:59 am

a. I want to distinguish between random moves throughout the day and from
looking at 1000s of charts, this filter gave me a good framework to start fro

Column Explanation:
Over time, I will add columns as I ask more questions about the data. For now, a b
explanation might help for some of them…

Day of Break

The day the stock gapped up.

Screenshot

A 1-minute candlestick screenshot of the pre-market and intraday price ac

Categories

I want to define this setup as “MIL - w/PMV,G,LF” which means Morning


Intraday Long - with PM Volume, Gap up, and Low Float

Examples of the Setup:


Currently, there are 58 tracked tickers on this database. Over time I will add more
get a more accurate representation of the answers to my questions.

$SNTI - December 2, 2024

$QMCO - November 25, 2024


$HOLO - February 7, 2024

Creating Your Own Database/ Playbook


If you want to do this yourself, a couple of tools that helped me find stocks to look

Zendoo Live Streams (On Youtube)

Helped to find stocks that had huge volume on the day. I had to go throug
each day’s livestream. This was very tedious but in the beginning, it helped
generate ideas for setups.

Spikeet

I started using this platform to help find stocks to add to the database. It h
free version with limited features. It’s a historic stock scanner where you c
filter by criteria and will spit out a basic database. I then see what stocks a
relevant to my database and go from there. You may think, why not just us
this platform to generate the entire database? There are many reasons but
simply; there will be criteria you cannot filter for or metrics to your questi
that cannot be tracked in platforms like this one. Manual is better!

BarChart

Barchart has great chart data that goes back decades where most platform
require a paid subscription.
Scanning every day

This will probably be the easiest way to track tickers as you can see what i
moving live and then track it for the day. However, when I was just startin
out, I had no clue what I was even looking for so this can be done after you
have a baseline understanding of how to create a database.

I highly recommend Austin Mitchum’s post called “Building A New Playbook” wh


further expands on the idea of playbooks and databases to enhance a trader’s edge

Baytrading: Insights from an equities day-trader

Building A New Playbook


"thoroughly conscious ignorance is a prelude to every real advance in science"
James Maxwell…

Read more

a year ago · 29 likes · 7 comments · Austin Mitchum

Downloading the Google Sheet


For Paid Subscribers, I added a link below to get access to the current database 🔽

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