![]() The idea is to limit stock selection to those that have higher odds of making an explosive run over a short period of time. The lower the number, the faster the stock usually moves. The higher the number, the slower the stock. #PENNY STOCKS THAT WILL SKYROCKET PROFESSIONAL#The formula is found by taking the stock’s 20-day moving average of price, then dividing it by the 14 or 21-day ATR.īased on this formula, stocks that return a value of 20 to 30 are very explosive and are usually best for swing trading, especially when they are liquid (easily tradeable for individual and professional investors alike).Įquities with readings around 40 are average, while above 60 is pretty slow. Using the ATR, we use a rather simple, yet highly effective formula to gauge whether or not a stock is “fast” enough to trade. Typically, these stocks will have a low float and trade with a high ATR (average true range) relative to their price.ĪTR (average true range) is a built-in technical indicator on most charting platforms that measures a stock’s volatility. ![]() Read on to learn about two incredibly simple and effective formulas to dramatically increase your odds of finding stocks with explosive capability… Formula For Fast MoversĪs mentioned above, momentum swing traders must select stocks that have a healthy motor and can run 20% or more in a short period of time. However, to make consistent gains from taking advantage of momentum in the market, swing trading is best accomplished by limiting your selection to stocks that have the ability to run 20-30% higher in a few weeks, rather than a few months.Įasier said than done, you might be thinking? Stocks that traders typically follow have a huge float (shares available for trading) and move at a snails pace, or not much faster than the S&P 500 itself. ![]() ![]() Many new swing traders struggle with stock selection, with most simply limiting their stock trading to a handful of the most popular stocks in the market. ![]()
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