Staying one step ahead of the market is a major aspect of trading. To do that, it’s critical that you know about price changes, news, and other developments as soon as they happen.

With real-time stock alerts, you can easily monitor the market’s movements and be the first to know when things change. In this guide, we’ll explain what real-time stock alerts are, why they’re important, and how you can set them up using Scanz.

What is a “Real-time” Stock Alert?

A “real-time” stock alert is an alert that you get with no delay after a trigger occurs. This type of alert is nearly instantaneous and requires a fast, live market data stream.

As an example, say you set up an alert for a new 52-week high in Apple stock. With a real-time alert, you’ll be notified the second that Apple shares set a new high – not a few minutes later. So, you can respond to that price action as soon as it happens instead of trying to chase after the market.

The Importance of Real-time Stock Alerts

Real-time stock alerts are critical for fast-paced trading, especially in today’s market environment when there are so many people waiting to pounce on a new piece of news or price movement. With real-time alerts, you can be one of the first to know about a new development. That in turn confers a first-mover advantage that could be the difference between winning or losing on a trade.

More broadly, real-time stock alerts help you take charge of your trading. You can set up alerts and then leave them to do their job while you research trade ideas or investigate a stock in more detail. If there’s something you need to know about, the alerts will make sure you’re notified as soon as it happens. In effect, real-time alerts let you use technology to monitor the market for you while you pursue other trading opportunities.

Types of Real-time Stock Alerts

There are two different types of real-time stock alerts: stock-specific alerts and scan-based alerts.

Stock-specific Alerts

Stock-specific alerts are real-time alerts that you manually create for yourself. These alerts typically target a stock that you’re monitoring for trading opportunities. They can be triggered by news headlines, significant price changes, or technical indicators. You can have stock-specific alerts for many different stocks, as well as multiple different alerts for a single stock.

Scan-based Alerts

Scan-based alerts are based on a set of criteria like those that you would use to build scans. They’re not stock-specific, but rather scan the whole market or a subset of the market for new developments. Real-time scan-based alerts are especially useful for finding stocks to day trade since they can notify you when stocks meet the requirements of your trading strategy.

How to Get Real-time Alerts in Scanz

There are several different ways to get real-time alerts in Scanz, including using the Alerts module, the Breakout Scanner, and the Pro Scanner.

Alerts Module

The Alerts module is the best place to go in Scanz for real-time stock-specific alerts. With the Alerts module, you can set up price-based, volume-based, and news-based alerts.

For price and volume alerts, simply enter the stock symbol you’re interested in monitoring and choose the indicator you want to use as your trigger. Scanz can issue notifications based on:

• Price (including bid or ask price)
• Volume (including share volume, dollar volume, and number of trades)
• Percent gain or loss

You can then set the threshold for your trigger. There’s no limit to how many alerts you can create for a single stock, and you can add comments to each alert so you know exactly what it’s for.

For real-time news alerts, you can choose to be notified of new headlines, SEC filings, or both. This is especially useful for following updates about a stock around earnings reports or other major announcements.

Breakout Scanner

The Breakout Scanner offers streaming real-time alerts on autopilot. It offers an easy way to keep up with important price changes across the market and is a great option for day-to-day monitoring that’s not tied to a specific trading strategy.

To customize the Breakout Scanner, you can choose which markets to watch and set filters for price, volume, and percent change. You can also limit the Breakout Scanner to issuing real-time alerts for one or more of your custom watchlists in Scanz. 

The Breakout Scanner can issue alerts for new highs and lows, price breakouts, volume breakouts, and block trades. You can customize the timeframe for any of these triggers as well as monitor breakouts over multiple timeframes. 

Pro Scanner

The Pro Scanner enables you to create fully custom real-time alerts. It’s best used to find stocks that align with the requirements of a specific trading strategy. Notably, you can use your existing scans as the basis for real-time alerts.

By default, the Pro Scanner displays all stocks that meet your scan criteria on a given trading day. However, you can get a stream of real-time scan results by opening the scan log. The log will add results in real-time as they meet your scan criteria, as well as notify you when stocks that had met your scan results earlier no longer do.

Conclusion

Real-time stock alerts are an essential tool for every trader. They help you stay one step ahead of the market and enable you to monitor important price action and news as it happens. With Scanz, you can easily get real-time stock alerts using the Alerts module, the Breakout Scanner, and the Pro Scanner.

Volatility is an essential element for short-term stock trading. As volatility increases, so too does the number of potential opportunities to trade.

In this guide, we’ll explain what volatility is and why traders should care about it. Then, we’ll show you how to quickly find the most volatile stocks today using Scanz. You can also get a daily report of the top movers when you sign up for the free Market Movers newsletter.

What is Volatility?

Volatility is a measure of the spread in a stock’s price within a given period of time. Unlike percent change, which tracks how much a stock’s price has gone up or down since market open, volatility accounts for all the changes in a stock’s price throughout the day. Put another way, volatility measures the variability in a stock’s price around its average price.

The best way to understand volatility is with an example. Say a stock opens at $120 and, as the market session progresses, it never moves lower than $119 or higher than $121. That stock has low volatility because the price is relatively static.

On the other hand, say the same stock drops to $105, then shoots up to $140, and finally drops back to $120. In that case, the stock would be considered highly volatile because the price fluctuates significantly in a short period of time.

Why Do Traders Care about Volatility?

Traders care about volatility because in creates opportunities for trading. The more volatile a stock is – that is, the more widely and frequently its price fluctuates throughout the day – the more opportunities there are to buy and sell for a profit.

While low volatility stocks can be traded, smaller price changes require a bigger investment to achieve the same profit. High volatility stocks offer bigger profit potential.  Of course, that also means that high volatility stocks carry more trading risk.

The Importance of Liquidity

One important thing to remember when looking for high volatility stocks is that volatility on its own isn’t sufficient for trading. Traders need stocks with both high volatility and high liquidity.

Low liquidity can cause high volatility simply because it’s difficult to buy and sell shares. Typically, it’s best to avoid low liquidity stocks because it can be hard to enter and exit trades, which exposes you to more risk. It’s much simpler to enter and exit positions when trading high volatility stocks that also have high liquidity.

How to Find the Most Volatile Stocks Today

Scanz offers a few different ways to find the most volatile stocks on the market right now.

Scanz Market Movers

The easiest way to find volatile stocks with Scanz is by using Scanz Market Movers. This list is put together by our team every trading day in mid-morning. You can quickly see the top 10 gainers and losers on the NASDAQ and OTC markets, as well as the top 10 stocks with the greatest amount of trading activity.

It’s a simple way to get an overview of the most volatile stocks on the market without even having to run your own scan.

Easy Scanner

Scanz Market Movers is based on the Easy Scanner. So, you can easily set up your own volatility scan if you want more data or a custom set of filters.

In the Easy Scanner, start by adding a filter for Current Trades. We recommend setting a minimum threshold of 1,000 trades to weed out low liquidity stocks from your scan results. Then add a column for Daily Volatility and sort your results by that to see the most volatile stocks.

You can also use the Easy Scanner to sort stocks by percent change or trading volume, which often track with volatility.

Pro Scanner

The Pro Scanner gives you more options to create a custom volatility scan. One of the best ways to do this is by combining a relative volume scanner with a price change scanner. For example:

5 DAY AVG VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME

AND

PERCENT CHANGE is greater than or equal to VALUE 5

AND

DAY’S TRADES is greater than VALUE 1,000

Note that we added a filter for trades to eliminate stocks with low liquidity.

You can also look specifically for stocks that are breaking out above a previous high on strong volume:

5 DAY AVG VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME

AND

LAST is greater than ANALYTIC 20 DAY HIGH by 5% AND More

AND

DAY’S TRADES is greater than VALUE 1,000

Breakouts are often associated with high volatility, since stocks are jumping several percent above a what was previously a resistance level.

Another nice thing about the Pro Scanner is that you have a lot of control over your scan’s targets. For example, you can add fundamental parameters to specifically scan for small cap stocks with high volatility. Or, you can scan for stocks with specific technical qualities, like an RSI below 80, to avoid potentially overbought setups. In the latter case, just add the parameter:

RSI – Relative Strength Index (Daily, 14) is less than VALUE 80

Conclusion

Finding volatile stocks can help you quickly identify potential trading opportunities and lead you to the most significant price action during a trading session. With Scanz, it’s easy to find volatile stocks using either the Easy Scanner or the Pro Scanner. Alternative, you can check Scanz Market Movers to get an overview of market activity and see the day’s most volatile stocks.

When a stock “breaks out” from a support or resistance level, it’s often a sign that a significant move is coming. So, traders typically watch breakouts closely. In fact, many trading strategies revolve around finding and trading breakout stocks.

In this tutorial, we’ll show you how to find breakout stocks using the Pro Scanner in Scanz.

What is a Breakout Stock?

A breakout stock is one that breaks through a support or resistance level. In many cases, when a stock breaks above a resistance level, it is the beginning of a sustained move higher. Conversely, when a stock breaks below a support level, it is often the beginning of significant bearish price action.

Traders are interested in breakout stocks because they offer an opportunity to open a position at the beginning of a new price trend. Often, momentum is strongest right after the start of a new trend, so there is potentially a lot of upside for traders who can correctly identify and trade breakouts.

Of course, not every move above a resistance level or below a support level will lead to a breakout. So, it’s important to follow up any scans for breakout stock with careful analysis of whether the movement is likely to be sustained.

How to Find Breakout Stocks

Before you can scan for breakout stocks, there are a few steps you need to take to define what a breakout stock is in the context of your trading strategy.

Step 1: Define Your Breakout Timeframe

Breakouts can happen on a variety of timescales. For example, a stock could break above its 4-hour high, its 50-day high, or its 52-week high. It could also break out above a 10-day moving average or a 200-day moving average.

This is important because how long the price movement following a breakout takes to complete is usually related to the timeframe of the support or resistance level. The price movement following from a breakout above a 50-day high might complete in a few days, whereas the price movement after a stock breaks through its 52-week high could take weeks to complete.

So, if you’re primarily interested in day trading or short-term swing trading, then shorter-term breakout timeframes – like a 10-day moving average or 20-day high – will make the most sense for your strategy. If you’re interested in holding breakout stocks for several weeks or longer, then looking for breakouts from a 200-day moving average or 52-week high make the most sense for you.

Step 2: Define Your Breakout Threshold

The second step to defining breakout stocks is to decide on a breakout threshold. That is, how much must a stock move above or below its support or resistance level in order for you to consider it a breakout?

Deciding on a breakout threshold comes down to balancing the risk that a move across a support or resistance level isn’t really a breakout with the risk that you could miss out on potential profit. For risk-tolerant traders, setting a breakout threshold of 5% may work, but you will need to carefully analyze the stocks that turn up in your scan. For more risk-averse traders, a breakout threshold of 10% is more cautious, but also means that you may be late to take a position in a new trend.

Step 3: Scan

Scanning for breakout stocks essentially comes down to putting your breakout timeframe and your breakout threshold together. You may also want to add additional scan rules based on relative trading volume. That’s because most sustained breakouts happen on higher than average trading volume.

Let’s take a closer look at how you can create a breakout scan using the Scanz Pro Scanner.

Pro Scanner Settings

Let’s say you want to look for breakouts above a 20-day high. In that case, you can use a rule like:

LAST is greater than ANALYTIC 20 DAY HIGH by 5% AND More

It’s a good idea to pair this with a volume filter to ensure that your results only include potential breakouts that are trading on strong volume:

DAY’S VOLUME is greater than ANALYTIC 20 DAY AVG VOLUME

If you want to look for a breakout with a longer timeframe, you can compare the current price against the 52-week high. In this case, since the timeframe is longer, we’ll use a more conservative 10% breakout threshold:

LAST is greater than ANALYTIC 52 WEEK HIGH by 10% AND More

You can further narrow your scan by looking for stocks that are experiencing high volatility during the current market day. This ensures that your scan results include breakouts that are in progress, as opposed to ones that took place in the last several days.

PERCENT CHANGE is greater than VALUE 5

Conclusion

Breakout stocks are stocks that break above a support level or below a resistance level and then make a significant price movement up or down. By using the Pro Scanner to spot breakouts, you can find opportunities to get in early on these large price movements. Breakouts happen over a wide range of timescales, so breakout stocks can be a target for day, swing, and longer-term traders alike.

Volatile stocks that see large intraday price movements offer significant opportunities for traders. In this guide, we’ll show you how to find volatile stocks using Scanz.

What is a Volatile Stock?

Volatility is a measure of how quickly a stock’s price changes and the magnitude of those changes. So, volatile stocks are those that typically see large price swings and frequently set new highs and lows. In contrast, low volatility stocks tend to trade in a narrow range and rarely see price moves of more than 1-2%. 

There’s no universally agreed-upon cutoff for how what price fluctuations are needed to call a stock ‘volatile.’ Generally, stocks that frequently see day-to-day movements of more than 2% or that vary in price by more than 10% per month are considered volatile. However, you can decide on your own cutoffs when defining volatile stocks.

Pros and Cons of Volatile Stocks

The reason that many traders are interested in volatile stocks is that they provide opportunities for trading. If a stock moves 5% in a day, that means that you have a potential upside of 5% from a single day trade. Intraday volatility also offers the possibility of repeated short-term trades to take advantage of each rise and fall.

However, with greater potential upside also comes more potential downside. For that same stock that moves 5% in a single day, traders you could lose 5% instead of gaining that amount. Volatile stocks can be difficult to time properly since they tend to move quickly, and you can suffer larger losses if you misjudge the market.

How to Find Volatile Stocks

Using a stock screener like Scanz is one of the best ways to find volatile stocks. Let’s take a closer look at how the process works.

Step 1: Define Your Volatility Threshold

To start, you need to define what constitutes a volatile stock for your own trading. As we mentioned, it’s up to you to decide whether a volatile stock is one that moves more than 5% a day, one that moves more than 10% a month, or something else entirely.

Think carefully about your own time horizon for trading. Swing traders might want to consider volatility on a weekly or monthly timeframe, while day traders will want to look at daily or even hourly price changes. You can also combine multiple timeframes, for example by defining a volatile stock as one that has moved at least 2% on the day of your scan and by at least 10% in the past month.

Step 2: Scan

Once you have a volatility threshold in mind, it’s time to build your scan. We’ll show you how to build a broad volatility scan using the Easy Scanner and a narrower scan using the Pro Scanner.

Easy Scanner

Scanning for volatile stocks with the Easy Scanner is simple. Just enter a threshold for the day’s percent change under the Filters menu, and the scanner will automatically display stocks that have moved by more than that amount since the market opened. It’s also a good idea to set a minimum dollar volume or number of trades, so that you’re only looking at stocks that are moving on high trading volume.

To organize the scan results, click the % Change column and sort stocks from greatest to least price change. You can also add columns to look at stocks’ 5-day percent change, percent off the 52-week high or low, or daily volatility. 

Pro Scanner

With the Pro Scanner, you have more control over defining your volatility and volume thresholds. To start, add a rule defining your volatility threshold. To find stocks that have moved at least 3% since market open, for example, you can use:

PERCENT CHANGE is greater than or equal to VALUE 3

To limit your scan to stocks that are also trading with above-average volume, you can use a rule like:

DAY’S VOLUME is greater than or equal to ANALYTIC 10 DAY AVG VOLUME

These rules give you a place to start, but you’re free to customize your scan with any additional parameters you like. For example, you can look for volatile stocks that are dropping below an RSI value of 30 to find stocks that are potentially oversold and could be poised for a reversal:

RSI – Relative Strength Index (Daily, 14) is less than or equal to VALUE 30

Alternatively, you can use a percent change threshold to scan for volatile stocks in the context of your favorite scan.

Conclusion

Volatile stocks offer more trading opportunities and potentially higher returns for day and swing traders. With Scanz, you can easily scan for volatile stocks using the Easy and Pro Scanners and customize your scans to suit any trading strategy.

Momentum trading is a popular strategy in which traders seek to buy winning stocks and sell them when they begin to run out of steam.

The key to any successful momentum trading strategy is finding stocks that have plenty of upside left in them and recognizing. In this article, we’ll show you two ways you can build a momentum stock screener and find momentum stocks using Scanz.

What is a Momentum Stock?

A momentum stock is any stock that is in the middle of a strong bullish or bearish trend. Typically, a momentum stock has seen its price rise steadily up (or down) for a prolonged period with relatively little interruption. 

When trading momentum stocks, it’s important to keep in mind that momentum always comes to an end eventually. The goal behind momentum investing is to buy when momentum is strong and sell when it starts to fade. That way, you can avoid holding the stock if and when a reversal occurs.

Factors to Consider Before Searching for Momentum Stocks

Before you start your search for momentum stocks, you’ll need to make a few decisions about what types of momentum stocks you want to look for.

First, consider your timeframe. Stocks can have momentum for a few hours – which is good for day trading – or for days or weeks at a time – good for swing trading. Medium-term investors can even find stocks with momentum that stretches on for 12 months or longer. 

Another thing to consider is how much volatility you’re willing to tolerate. Momentum stocks can gain ground in a nearly straight line with no intermittent drops. Alternatively, they can establish a strong trend with large price deviations above and below the trendline. How volatile a momentum stock is will directly impact your trading risk.

Finally, it’s a good idea to think about what parts of the market are experiencing momentum broadly. For example, a specific market sector may be experiencing momentum, which bodes well for finding individual momentum stocks within that sector. At times, different market capitalization groups can experience momentum, too. Small-cap stocks, for example, might be steadily rising while large-cap stocks are wavering.

Why Use a Momentum Stock Scanner?

Creating a stock scanner is not only the easiest way to find momentum stocks, but also one of the most effective methods. That’s because the list of stocks that are experiencing momentum can change on a day-to-day basis. Volatility can rise or fall, news can amplify or derail trends, and reversals can happen with little warning.

So, it’s important when searching for momentum stocks to scan frequently. If you have trades open, running a momentum screen can also alert you to when stocks fall below your threshold for strong momentum.

How to Find Momentum Stocks in Scanz

There are two ways to find momentum stocks in Scanz: with the Easy Scanner and with the Pro Scanner. We’ll show you how to use both tools and offer some example screens.

Easy Scanner

The Easy Scanner is the best place to start if you’re just beginning a new search for momentum stocks. To get started, add filters for % Change and Current Trades to limit your scan to stocks experiencing high trading activity:

Then you can sort the results by the % Change or Trades columns to find see what stocks are seeing the most volatility and trading interest for the current day.

Pro Scanner

For more precise control over your momentum screen, you can use the Pro Scanner. With the Pro Scanner, it’s easy to filter stocks by percent change or relative volume. For example:

PERCENT CHANGE is greater than VALUE 5

AND

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME

You can also screen for stocks that are experiencing momentum on a weekly timeframe by looking for stocks that have risen sharply over the past 5 days. In this case, it’s also a good idea to check that trading volume has been relatively high over the same timeframe and that the stock is continuing to move upward:

LAST is greater than ANALYTIC CLOSE 5 DAYS AGO by 5% AND More

AND

5 DAY AVG VOLUME is greater than ANALYTIC 30 DAY AVG VOLUME

AND

PERCENT CHANGE is greater than VALUE 3

You can also bring technical indicators like MACD and RSI into your momentum scan when using the Pro Scanner. For example, many momentum stocks have an RSI above 70 because of their rapid price appreciation. So, you can create a screen using RSI, percent change, and trading volume:

RSI (Daily, 14) is greater than VALUE 70

AND

PERCENT CHANGE is greater than VALUE 5

AND

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME

Conclusion

A big part of the challenge in momentum trading is simply finding stocks with strong momentum. With the Easy and Pro Scanners in Scanz, you can quickly screen for stocks experiencing above-average volatility and trading interest. Plus, with the Pro Scanner, you can easily scan for momentum stocks based on technical indicators like RSI.

Stocks that the market is undervaluing are prime for trading and long-term investing. In some cases, these stocks can have significant upside potential with relatively low risk. 

In this guide, we’ll show you how to find undervalued stocks using the Pro Scanner in Scanz.

What is an “Undervalued” Stock?

An undervalued stock is any stock for which the current market price is less than its “true” worth. A stock’s intrinsic worth is typically determined through financial modeling and fundamental analysis. 

Stocks can become undervalued when the market lacks an important piece of information or overlooks a developing trend. For example, Amazon was undervalued for a long time in its early days because investors underestimated the economic power of online shopping and cloud computing. 

Tips for Trading Undervalued Stocks

Trading undervalued stocks might seem like a sure thing – after all, “undervalued” implies that the price will eventually be corrected and rise. However, there are a few important things to keep in mind when approaching these stocks.

Value is Subjective

The first thing to remember is that value is subjective. There is no single formula or metric to determine a stock’s “true” value. In fact, there are multiple valuation models that you can apply and they often yield differing results. So, it’s typically impossible to know with any certainty that a stock is undervalued. 

In addition, some types of value are hard to put a number to. Even if you believe, for example, that a stock is undervalued because of changing consumer habits, it can be difficult to figure out what those changing habits will mean for the company’s revenue.

Stocks Can Stay Undervalued for a Long Time

Another thing to keep in mind is that just because a stock is undervalued doesn’t mean the price will rise immediately. In fact, undervalued stocks can stay that way for months or years – as long as it takes for the market to fully appreciate a company’s potential.

So, value investors need to be patient. This style of investing is typically better suited to long-term investors than to traders looking to get in and out of a stock quickly.

Cheap Doesn’t Mean Undervalued

It’s also important to recognize that a stock trading at a cheap price relative to its historical average price is not necessarily undervalued. A stock’s market price can drop in response to poor earnings or a dimming outlook and the new, lower price will represent a fair value.

When searching for stocks that are trading at discounted prices, it’s essential that you carefully evaluate the reasons why it’s trading cheaply in the first place.

How to Find Undervalued Stocks

Finding undervalued stocks requires creating a definition of what it means for a stock to be undervalued. The simplest ways to classify undervalued stocks are to look for those with low prices relative to their historical average or low price-to-earnings ratios. As we noted, though, these metrics on their own may not give you the full picture of a stock.

You can also look at more comparative metrics. For example, you can find undervalued stocks by looking at a company’s price-to-earnings ratio or market cap relative to its industry peers. Another option is to compare a stock’s cash flow or cash on hand to its debt to look for financial strength that the broader market may not recognize.

Strong fundamental analysis is key to finding undervalued stocks. For many value investors, it makes sense to use a combination of these metrics to find undervalued stocks and develop an estimate for what they should be worth.

How to Find Undervalued Stocks in Scanz

One of the best ways to search for undervalued stocks is to use the Pro Scanner in Scanz.

To begin, you can create a broad scan using several of the fundamental filters in combination. For example, you can search for companies that have a market cap of less than $1 billion but an annual profit of more than $100 million.

MARKET CAP is less than VALUE 1,000,000,000

AND

GROSS PROFIT is greater than VALUE 1,000,000

You can also use the Pro Scanner to look for companies that have high cash flow relative to debt: 

CASH is greater than ANALYTIC DEBT by 10X AND More

On top of these fundamental parameters, you can use additional filters to narrow your search for undervalued stocks worth trading right now. For example, you can scan for stocks that are just below their 52-week high or far above their 52-week low to find stocks that are performing well. You can also add a relative volume scan to identify stocks that have a lot of interest from traders:

LAST is less than ANALYTIC 52 WEEK HIGH by 5% AND Less

AND

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME

It can also be helpful to add a filter to limit your search to stocks with a high percentage of institutional or insider ownership, since this typically reflects a strong belief in a company’s future potential.

% INSIDERS is greater than VALUE 20

AND

% INSTITUTIONS is greater than VALUE 30

Conclusion

Undervalued stocks are good targets for traders and investors alike. However, it’s important to carefully consider why you think a stock might be undervalued and why the market might value a stock at the current price. Once you have criteria in mind for how to define value, you can use the Scanz Pro Scanner to find undervalued stocks to trade.

Small cap stocks often have higher growth potential and more volatility than large cap stocks. While these stocks can be somewhat risky, they also offer plenty of opportunities for trading.

In this guide, we’ll explain what to look for when trading small cap stocks and show you how to find small cap stocks using Scanz.

What is a Small Cap Stock?

A small cap stock is any stock with a market cap between $250 million and $2 billion. Stocks with a market cap under $250 million are typically referred to as micro-cap stocks.

Small cap stocks can also be penny stocks – stocks with a share price less than $5 – but that’s not necessarily the case. Many small caps have a higher share price, but only a limited number of shares available.

What Types of Small Cap Stocks Should You Trade?

There are thousands of small cap stocks across the NASDAQ exchange and OTC markets, so you need to be specific in defining what types of small cap stocks you want to trade.

The best place to start is to determine what your goal is. Are you looking for a long-term investment in a promising young company? Or are you interested in short-term trading around a specific technical setup? Defining your intention ahead of time is key to finding small cap stocks that are right for you.

If your goal is to trade small caps because of their high volatility, the next thing to consider is what type of setups you want to trade. For example, you could look for small cap stocks with bullish momentum or stocks that are poised for a breakout.

It’s also important to think about your timeframe. Trading intraday patterns will require different search criteria than swing trading small cap stocks over several days or weeks.

How to Find Small Cap Stocks with the Pro Scanner

Once you know what types of small cap stocks you want to trade, you can find them using the Pro Scanner in Scanz.

To start, create a filter to limit your search to small cap stocks:

MARKET CAP is between 250,000,000 AND 2,000,000,000

You can also add a price filter to search for only shares that cost more than $5 if you want to eliminate penny stocks from your scan.

Next, add additional parameters that make sense for your setup. You might add a percent change filter, for example, to find only small caps that are experiencing big price movements today. Or you can use a relative volume screen to find small caps that are seeing a lot of interest from traders.

PERCENT CHANGE is greater than or equal to VALUE 5

AND

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME

Example: Small Cap Breakouts

Let’s look at how you can use the Pro Scanner to look for a common small cap setup: a breakout above the 52-week high. For this scan, you’ll want to look for small cap stocks that are experiencing a big price movement on strong volume and that are now priced above their 52-week high:

MARKET CAP is between 250,000,000 AND 2,000,000,000

AND

PERCENT CHANGE is greater than or equal to VALUE 5

AND

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME

AND

LAST is greater than 52 WEEK HIGH

You can also find small cap breakdowns using a similar scan. Just change the price parameter to filter for stocks with a last price that is less than the 52-week low.

Example: Small Cap Volume Leaders

Another useful small cap scan can help you find small cap stocks that have higher than usual trading volume. Abnormally high trading volume is often accompanied by volatility and the higher liquidity makes it easier to get in and out of trades quickly.

To find small cap volume leaders, you can use two volume filters:

MARKET CAP is between 250,000,000 AND 2,000,000,000

AND

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME by 10% AND More

AND

$VOLUME is greater than VALUE 100,000,000

These filters can be easily adjusted to suit your goals and you can sort the scan results based on volume.

Conclusion

Small cap stocks offer high volatility and lots of growth potential compared to large cap stocks. With the Scanz Pro Scanner, it’s easy to find small cap stocks that fit your target setup for trading.

A stock’s float is the number of shares that are available to the public for trading. In some cases, stocks can have a much lower float than the number of outstanding shares. These low float stocks are often highly volatile, which creates opportunities for traders.

In this guide, we’ll explain everything you need to know about low float stocks and show you how to find low float stocks using Scanz.

What is a Low Float Stock?

A low float stock is a stock that has relatively few shares available for trading. Typically, any stock with fewer than 20 million shares available as float is considered a low float stock.

A stock’s float is the number of shares available to the public and doesn’t include shares that are held by company insiders or institutions. It also doesn’t include restricted stock, which can include shares that are in a lock-up period following an IPO. So, a stock’s float can be much lower than its number of outstanding shares, which is simply the total number of shares a company has issued.

It’s important to note that a stock’s float doesn’t remain constant over time. The number of floating shares of a stock can change as restricted stock is released or as a company buys back shares. Floating shares can also increase or decrease in response to insider or institutional buying or selling activity.

The Appeal of Low Float Stocks

Low float stocks can be attractive for trading because often experience high volatility. That’s because when a stock has low float, a relatively small trade can have a significant impact on the share price.

For example, say an individual investor sells 1 million shares of a company. If the stock has a float of 30 million, the impact that sale has on the stock price will be minimal. However, if the stock has a float of just 10 million, then a sale of 1 million shares can move the stock price quite a bit.

High volatility means bigger and more frequent price changes. For aggressive traders, those price changes can create opportunities for profit.

How to Find Low Float Stocks

The easiest way to find low float stocks with Scanz is using the Pro Scanner. To get started, simply use the float parameter to look for stocks with a float of less than 20 million:

FLOAT is less than VALUE 20,000,000

The float parameter can be found under Fundamentals > Share Structure.

This will return a list of all stocks with low float. However, if your goal is to find low float stocks that are primed for trading, then you’ll want to add additional parameters to your scan.

For example, you could use a percent change rule to scan for low float stocks that are experience a large intraday price swing:

FLOAT is less than VALUE 20,000,000

AND

PERCENT CHANGE is greater than VALUE 5

It can also be useful to look for low float stocks that are experiencing higher than average trading volume, since high volume is often accompanied by volatility. In addition, high relative volume signifies that there is enough liquidity for trading.

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME by 20% AND MORE

Example: Finding Low Float Stocks to Trade

Putting it all together, you can create a low float stock screener that identifies stocks that are making large intraday price movements on above-average volume:

FLOAT is less than VALUE 20,000,000

AND

PERCENT CHANGE is greater than VALUE 5

AND

DAY’S VOLUME is greater than ANALYTIC 10 DAY AVG VOLUME by 20% AND MORE

If you want to create an even finer scan, consider pairing a low float scan with another fundamental stock scan.

Conclusion

Low float stocks can be highly volatile and that spells opportunity for traders. Finding low float stocks using the Scanz Pro Scanner is easy and you can find actionable setups by using price and volume rules in your scans. Plus, you can include a broader range of fundamental data and technical indicators to quickly find low float stocks to trade.

OTC markets are popular among traders looking for penny stocks and microcap stocks that don’t trade on the major exchanges. However, these markets lack some of the safeguards of stock exchanges and OTC stocks often don’t have the same level of regulatory scrutiny as exchange-traded stocks.

So, it’s important to understand how OTC markets work, what the different OTC market tiers are, and what the classifications that are given to OTC stocks mean.

What are the OTC Markets?

OTC, or over-the-counter, markets are decentralized stock markets where individuals buy and sell stocks directly with each other. Typically, the term OTC markets refers to the specific decentralized markets run by The OTC Markets Group, a for-profit financial markets provider.

OTC markets are typically home to penny stocks and micro-cap stocks that don’t meet the stringent listing requirements of major US exchanges. Some well-known foreign companies, like Nestle, Volkswagen, and Samsung, also trade on OTC markets in order to avoid costly US exchange regulations.

OTC Markets vs. Other Exchanges

OTC markets operate very differently from other exchanges. First, they are fully electronic and do not have physical locations. Buy and sell orders are matched automatically or by dealers, and the prices at which transactions occur are not always visible to everyone in the market.

As a result of this system, liquidity is frequently low in OTC markets. Prices can swing wildly throughout the day, particularly compared to major exchanges. Particularly for penny stocks, it can be difficult to enter or exit positions quickly.

Another important difference between OTC markets and other exchanges is in how they are regulated. OTC markets are subject to much less oversight by the SEC than major exchanges, and there are fewer rules around what information companies must report. It’s critical that you do your own research when buying stocks on OTC markets, especially since some smaller companies have been known to exaggerate or misstate financial information for investors.

OTC Market Tiers

The OTC Markets Group platform is divided into three distinct marketplaces: OTCQX, OTCQB, and OTC Pink.

OTCQX

The OTCQX market has the strictest regulatory and reporting requirements of the three OTC market tiers. In order to list on this marketplace, companies must report to the SEC, disclose material news to investors, and be sponsored by a third-party such as a bank or investment firm. In addition, companies on the OTCQX market must meet revenue, stock price, and market cap minimums.

Given these stringent requirements, stocks on the OTCQX markets are considered more trustworthy and typically have more liquidity than those on the lower market tiers. 

OTCQB

The OTCQB market is a step down from the OTCQX market in terms of what is required of companies in order to list shares. Companies must be audited annually, report to the SEC or a banking regulator, and must have a minimum share price of $0.01. These companies must also have a float of at least 10% of outstanding shares.

This marketplace includes many companies that are growing and need access to public markets for capital, but don’t yet have the capacity to meet the reporting or revenue requirements of the OTCQX marketplace.

OTC Pink

The OTC Pink market, also known as the ‘Pink Sheets,’ is the least regulated OTC market. Companies on the OTC Pink market do not have to be audited, although they must report to the SEC. They must also file a form with FINRA in order to list.

Companies on the OTC Pink marketplace are often penny stocks, shell companies, and companies that are in financial distress. Be cautious of scams when trading stocks in this market.

Other OTC Market Classifications

Stocks on the three OTC market tiers are classified in several additional ways that indicate their current status or to provide warnings to potential investors. Typically, these classifications are visibly listed on The OTC Markets Group page for a particular stock.

Delinquent SEC Reporting

A delinquent SEC reporting classification indicates that a company is not up to date with its SEC reporting requirements under the Exchange Act. Companies that are delinquent may be subject to removal from the OTC markets by the SEC until reporting requirements are fulfilled. In other words, a company that falls behind on its reporting may have trading of its shares suspended.

Shell Risk

The OTC Markets Group may classify a company as a Shell Risk if the company has financial or other characteristics of a shell company. This classification is assigned subjectively based on a company’s financial disclosures and is not based on companies’ self-reported shell status. Shell companies can be problematic for investors because they hide the underlying company’s financial activity and changes in operations.

Dark or Defunct

Companies labeled as Dark or Defunct are those that have failed to provide any public financial updates, either to the SEC or to The OTC Markets Group.

Caveat Emptor

The Caveat Emptor classification is a public warning to investors issued by The OTC Markets Group. This designation indicates that the company has been associated with fraudulent or potentially illegal activity or has a pending suspension of trading by regulators. 

Conclusion

The OTC markets are where the shares of thousands of startups, micro-cap companies, and foreign companies trade. Understanding the three different OTC market tiers can help you evaluate the risk of a particular stock and gauge the stock’s regulatory oversight and liquidity. When trading stocks on the OTC market, be sure to look for classifications by The OTC Markets Group that may provide additional information about a company’s regulatory status.

One of the biggest hurdles many day traders face is finding stocks that are primed for quick, profitable trades. In this guide, we’ll show you how to find stocks to day trade in real-time using Scanz. 

Factors to Look for When Day Trading Stocks

There are two main things to look for when day trading stocks: liquidity and volatility.

Liquidity is essential for day trading because you need to be able to enter and exit trades quickly. When there are many traders buying and selling shares of a stock and liquidity is high, then this getting in and out of trades is no problem. On the other hand, when liquidity is low, you could find yourself stuck holding shares or unable to enter a position at the price you need to turn a profit.

Volatility refers to the range of a stock’s price within a specified timeframe. Stocks with higher volatility tend to present more trading opportunities due to their broader price ranges. For example, if a stock trades within a 1% price range (i.e. between $10/share and $10.10/share), there are very few trading opportunities. The most you can expect to make from a trade is 1%. If a stock trades within a 10% price range, there are far more trading opportunities.

While there are hundreds of unique setups for traders to focus on every day, most active day traders consider liquidity and volatility to be critical components of any great trading setup. 

How to Find Stocks to Day Trade

We’ll break down the process of finding stocks to day trade into three steps:

Step 1: Define Your Goal

The first step for every day trader should be defining your goal. That means getting into specifics like what types of stocks you want to trade, what types of setups you’re looking for, and what risk-reward ratio you’re willing to trade around.

Looking for “stocks to day trade” is too narrow of a goal. You need to start by defining the ideal setup for your personal trading style. 

A good day trading goal might, for example, focus on large-cap stocks experiencing a breakout or breakdown. You could also have a goal built around scalping or intraday momentum trading.

Step 2: Identify Your Setups

Once you’ve defined your day trading goal, the next step is to categorize the ideal setups that will help you achieve your goal.

If your goal is to scan for breakout stocks, you’ll need to define the type of breakout you’re looking for: say, a 52-week breakout or a 1-hour volume breakout. If your goal is to find momentum stocks, you’ll need to decide whether momentum is defined based on MACD, moving average crossovers, or something else.

Step 3: Quantify Your Setups

Finally, you need to turn your ideal setups into quantifiable rules that you can use to create stock scans.

In the case of a 52-week breakout, for example, you might quantify the setup by looking for stocks with a last price that is greater than the 52-week high. In the case of intraday momentum trading, you might quantify your setup by looking for stocks with a 10-minute moving average above the 30-minute moving average.

Example: Scanning with the Pro Scanner

Let’s look at some examples of how you can use the Pro Scanner in Scanz to find stocks to day trade.

52-week Breakout

To find 52-week breakout stocks, you can start with a simple scan:

LAST is greater than ANALYTIC 52 WEEK HIGH

That single parameter will find all the stocks that have hit new highs during the current trading session. You can make your scan even more actionable by combining this with a rule to look for stocks trading with above-average volume:

DAY’S VOLUME is greater than 10 DAY AVG VOLUME by 10% AND MORE

Keep in mind that your initial scan doesn’t need to be perfect. Test out a scan, see what setups it returns, and then refine your scan to get closer to your ideal setup. You can also broaden or narrow your scan parameters based on market conditions.

Overbought/Oversold Trading

You can also create a simple RSI stock screener to look for stocks that are overbought or oversold on an intraday timeframe. For example:

RSI – Relative Strength Index (Hourly, 14) is less than or equal to VALUE 20

This will find stocks that are severely oversold based on their 1-hour RSI. Once again, you can combine this with a volume scan to find stocks that are oversold and trading with high liquidity.

If you are looking for more scan ideas, here are some guides worth checking out:

• How to Scan for Penny Stocks
• How to Use the Easy Scanner
• How to Build a Relative Volume Scanner
• How to Scan for Breakouts

Conclusion

Finding stocks to day trade is easy with the Scanz Pro Scanner. Simply define your goal, choose your setups, and then build a scan to find setups in real-time. Once you’ve got a scan, don’t be afraid to test and refine it to find even more actionable setups for day trading.