Scanning for Gaps in the Pre-Market with ThinkOrSwim - YouTube

Alright hey guys this is Josiah, I just wanted to do another quick video here

to basically show you how i scan for gaps in the morning, and i want to do this before the market gets open here so it's about 8:05 cST

market's going to open in about 25 minutes here

and so what i've done, i trade using thinkorswim and thinkorswim doesn't come with built-in scans that allow you to find gapping stocks in the premarket

before the market opens.

they have some built in scans that allow you to find gaps after the market opens but those are really not very useful as far as what i've found

so i was kind of forced to, a choice between a premium scanner between 100-200 dollars per month -- per month

to subscribe to their data and pay for their service, their scanner

OR at some points in my trading i've been a member of a trading room and so they would help develop the gap list in the morning

so that i wouldn't have to have my own scanner

but once i started trading more on my own, i needed to come up with a solution that would work for me

and so then i was kind of stuck with either the premium scanners or, basically, that was the option

so what i ended up doing is developing some custom programmed thinkscripts for thinkorswim

that allow you to find those gaps in the premarket and it's kind of funny, thinkorswim really makes it hard to do this

they make it pretty non-intuitive if that's a word

but i was able to find workarounds and was able to develop something that would work so that i could take advantage of the free market data and scanning capabilites in thinkorswim

and so i could get rid of those premium scanners that i'd been paying for

so here we are in the scan tab, stock hacker sub tab in thinkorswim

and basically i've gone over here and loaded up, i have several different scans here available

i've my tier 1 gap ups and downs

i have a scan for all premarket gaps

and then down here i have some improved versions of the built in scans that work after the open

any gap, any significant gap, so this would be for a gap happening from the close of yesterday, and this would be a gap happening totally outside the range of yesterday

and then i have the tier 1 gap downs and up that work after the open

and so the all premarket gaps that finds only gaps that are where the stock price is moving outside the range of the prior range altogether, so either above the high of yesterday or below the low of yesterday

completely outside the range of yesterday

and the tier 1 gap up and gap down that means that narrows it down even further and says i only want stocks moving in the opposite direction of the prior day's price movement

so if it's a red candle yesterday i'm gapping up, or if its a green candle yesterday i'm gapping down

and so it's kind of an additional shock value and so i call that a tier 1

so for the all premarket gaps i have some basic criteria in here, smae thing that pretty much anyone can have

i only want stocks > $4 or less than $200

i want them already to have volume

i have the avg true range, wanting only stocks that move a significant amt during the day

so i have this set to > .50

you don't want stocks that only move .20 per day

it's really hard to make any money in a stock like that

then i have the avg vol over the last x num days to be greater than .5 million

that's the criteria i use

some people use over 1million and so forth you can set that how you want

then this is kind of the line where all of the premarket gap scanning happens

this is where it determines whether or not the current price is outside the prior day's range altogether

and then i usually set this to return at least 500 stocks and you can see here sometimes it's currently returning 124 today, but sometimes 800, etc.

so if you only have this set on 50 then it's not going to be letting you see everything out there

so you want to make sure that's high enough

if this says 50 of 800, you want to make sure it's above 800

so that it'll return every stock available

from there what i do is grab anything above 1% drag that onto my radar list

so these are all the gaps down more than 1%

and if you notice the percent change column is all zeros, we're in the premarket so this is not updating

but the mark % change this continues updating overnight

so this is useful for us to sort the stocks that are moving in the premarket

and find the ones that are the most interesting

then we can scroll down here and look at all the gap up stocks that are more than 1% and drag those to the radar list

and there's some that i just avoid altogether

there's several interesting stocks this morning

so i drag these over to radar

and then i switch over to my charts

and charts subtab

this is my multiple timeframe analysis

daily, 5 min no premarket, 5 min with, then 1 min

so i'll just go through these individually and look for situations that i think are interesting like this morning YHOOis interesting

because it's trading down under this base

breaking down under this base that has been created here anbd so that's kind of an interesting setup and want to look at that furhter

and so any i find interesting i drag to focus

and form there i drag into my ... multiple time frame analysis another setup i have where i can look at MTF for several stocks at the same time

so i'll have Daily, 5 min, 1 min all for the same stock

then another

then another

i only look at 4 focus stocks during the open

and that kind of keeps me from getting scatter brained

and not focusing on what 's going on and missing trades

so and then i'll drag these focus stocks over to these charts here

and be ready for the market open

so that's kind of how i have my setup currently

i go from the scanner, find these, drag all the interesting gaps > 1% ove rhere

narrow them down by their chart

any breakdowns and different setups i like to see

that i find interesting i move up to the focus list

i might narrow that down further and then move that over into my 4 thumbnail focus stocks

i drag those into the MTF thumbnails here so i can keep an eye on just the snapshot of what the stock looks like on every timeframe in that instant

and so it allows me to get the instant glance whether the stock is making an attractive setup in all those times

so that's how i have it setup

if you're interested in getting ahold of this scanner

that will allow you to take advantage of the free market data in thinkorswim

come to bigger move .com

my website made a post that will allow you to check out

describes what you get, all those scanning setups that I showed a moment ago

and it allows you to use Paypal

i recognize that there probably be a lot of people out there that would love to get rid of those 99/mo fees with premium scanners

love to take advantage of the free scanning capabilities in thinkorswim

and so i wnated to get this out there for other gap traders like me that i thought would find this beneficial

i hope that helps guys, if you have anny questions, send me an email and thanks for watching!