Thinkorswim offers a premarket gap scanner that can be used in a multitude of ways. One of the things that it can be used for is to find gap & go setups. This might sound like a foreign concept to you. If you don’t know the ins and outs just yet, don’t worry because that’s exactly what we’re going to be talking about in this article. As such, if you would like to find out more about how you can use Thinkorswim’s premarket gap scanner to find gap & go set ups, then keep reading down below.
What Is The Pre-Market Gap Scanner?
Gaps are measured from the market’s closing price the day before to the current day’s opening price. A gap occurs when a stock opens at a higher price the next day than it closed at the previous day. However, gaps can be up or down and can occur with all stocks from all markets.
A pre-market gap scanner is a series of scanners that are used to find the highest gapping stocks before the market opens. The gaps are important to identify as they show a sudden move by any given stock, which are often the indicator that a bigger move is coming. If you keep on top of the gaps with a pre-market gap scanner, you will be able to make better informed decisions using all the information that is available to you.
Why Use A Pre-Market Gap Scanner?
If you are closely monitoring the premarket trading activity, you are likely on the way to edging out the competition. This will help you with your day trading by providing you with insight other traders may not have. As such, you can start the trading day the right way, with all the information you need at your fingertips.
It is important for you to understand, however, that pre-market trading volume is often light, so you won’t see massive differences in the stocks. As such, when you are using a scanner, make sure that you are only looking at stocks that are trading with above-average premarket volume. This will give you the insight that you need for potential trades.
How Can It Be Used To Find Gaps?
First off, you will want to:
- Run a scan, which can be done by clicking the scan button on the top of the screen.
- From here, it will give you a range of defaults, but you should delete these and start over for the best results.
- You can add filters to your search and one of these is ‘stock.’ If you click on ‘stock’, then change it to ‘last’ you will get a list of yesterday’s stocks.
- You can set the minimum and maximum range of money for the stock price, so you can set this for the pierce range that you are looking for. The smaller the range, the less data there is going to be for you to go through. You can set this up however you want to but you’re also not going to get much from the gap scan if you set your limit too high because the percentage moves don’t tend to be there.
- Once you have done this, you want to add another filter, then click on stock again. This time you’re going to be selecting the volume. Think carefully about the threshold that you want to set here so that you are getting the right data.
- There are of course, other filters that you can go through such as the ‘study’ filter which will give you more options to choose from.
- There are also the patent option and fundamental filters for you to use depending on what you are searching for specifically.
- After you have added all of your filters, click scan and then there will be a list of stocks for you to sort through.
- You can add in things such as the mark percent change if you would like to filter them further which will help you find the gaps that you want to trade.
Advantages Of Gap & Go Setups
Gap & Go setups have a number of advantages which is why a lot of people choose to trade this way. The first is that it is possible to make high profits using this system. They are also super easy to identify, making your life so much easier than if you were to use one of the other strategies out there.
If you manage to find stocks that have good volume, they will largely prove to be reliable and allow for little chance of manipulation. This means that you are getting the most out of the stocks on the market.
The final advantage that we are going to look at is that it is perfect for day trading the market open. You want to trade at the market open or just after when it comes to gap & go setups as this is how you find the best gaps in the market. As such, if you are someone who likes to trade when the market opens as opposed to throughout the day, this is the strategy for you.
So, the advantages summed up are as follows:
- You can see high profits
- Gaps are easy to identify, especially using a premarket scanner like the one offered by Thinkorswim
- Reliable information that you can use for the days trading
- It is perfect for day trading the market open
Why Use A Scanner To Find Gaps?
This is the easiest way to find the gaps on the market. If you are going to trade gaps successfully, then the premarket scanner will search for stocks that have volume in the premarket. Every morning there are new gapping stocks that update on the pre market scanners, allowing for those people who are ready to get ready.
We hope that you have found this article helpful, and now have a better understanding of how you can use Thinkorswim’s Premarket gap scanner to find gap & go setups. Take this advice, and use this tool and you will be able to find gap & go set ups without much hassle. Good luck and happy trading!
Polish your trading skills with thinkorswim. To learn more, click here.