A trader explains how to use pre-market volume to predict daily trading range, then enter low-float stocks during consolidation after the initial push. He targets a 20-35% pushing percentage as a sign of strong demand, and adds to the position when the stock breaks down between 10 and 11 am.
You want the retail to participate into the trade to basically transfer their money into your wallet. So go into aftermarket open. We want to know how much volume traded in the pre-market. Assume today traded 10 million shares in the pre-market, and I'm estimating today is going to trade between 50 million shares to 100 million shares. Now by statistics, majority of the volume concentrates between 9:30 to 11:30. We want to track down the average pushing percentage. Ideally we want to look between 20% pushing percentage to 35%. Now the higher the percent, the better the winning percentage is. Now here we have to separate them by float. Typically when we're around into between 1 million to 2 million, the percent of pushing percentage becomes much higher because it's low float, high demand. I have tracked down between 1 to 2 million, average percentage is between 30% to 35%. After that, the stock tends to consolidate. That's where I typically start to size in. And between 10 to 11, the stock shows the first weaknesses on the breakdown. That's where I add a full position risking this consolidation.
