Whether you are using free information available online or have access to real-time pre-market intelligence through your live trading account, being able to see what is happening before the market's opening bell can provide advantages and opportunities. Scanning for and isolating stocks that are making gains in the pre-market means being able to jump in when fewer traders are involved, or alternatively, having your finger on the pulse and knowing where the action is going to be when the market opens.
How to Scan for Pre-Market Gainers
Find a reliable pre-market data source. Different exchanges have different rules on disseminating information, therefore finding free pre-market data may have to come from multiple online sources. The Nasdaq provides free real-time pre-market information on its website, with up-to-the-second data on stocks listed on the Nasdaq exchange. CNN Money provides a short list of the top five gainers and losers in the pre-market. Your broker or trading software may also provide a list of pre-market stock gainers.
Filter pre-market gainers based on current and average volume. Just because a stock moved significantly overnight does not mean it is tradable for the average investor. Make sure the stock is doing adequate volume both in the pre-market and during regular hours (based on a historical average) to ensure a trade can be entered and exited with relative ease.
Filter the pre-market gainers further, this time based on stock price. Some traders like to trade penny stocks while others like trade stocks that are priced in the triple digits. Filter out stocks that do not match your trading style or capital limitations.
View the charts of the stocks remaining on your pre-market gainers list. By looking at the historical price action of the chart, support and resistance levels can be determined. These levels may serve to provide entry and exit points if a trade is taken.
- If you have a live trading account with a broker, it is likely to provide you access to pre-market trading and real-time quotes. Use the broker's internal scanner and news feed (if available) to find pre-market stock gainers.
- If you do not have a live trading account, open a demo account with an established online broker. See how pre-market trading works and how to find stocks that are making moves outside regular market hours.
- Even delayed (not real-time) pre-market data can be useful as it will alert you to which stocks are moving and where to focus your attention.
- During pre-market hours there are fewer traders involved in the market. This can result in erratic moves and misleading information.
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