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Every morning, the trader sits down at his computer to start the day, and the dilemma he faces is always the same: find a stock or two or three to make money on that day. This really shouldn’t be that difficult, but for some traders it is.

Let’s see if we can break it up and maybe make it a little easier.

First, let’s start with some basics about your work habits. The markets open at 9:30 EST, right? WRONG! Trading these days starts at 7am! That’s the action very early in the morning. Then you have what some traders call the official pre-market trading which starts at 8 am Next is the official market open at 9:30 am EST. This means that if you have been sleeping late, you may be missing out on some very interesting morning trades. A word of caution here though – pre-market trading also has a higher element of risk associated with it due to illiquidity.

Okay, now that I’ve got you out of bed, you can start scanning the pages of the Wall-Street Journal, Independent Business Daily and… WRONG again!

Sure, you might find a trade or two in one of these posts, but in too many cases that news will be too old to trade. In addition, the news in those publications, or the reaction of the stock market, will be seen in other places.

The first thing you may want to do in the morning is check the action after hours from the day before. This information can be found in several places. I use the NASDAQ home page under the Extended Hours Trading link on the left side of the page. This will give you a list of the actions that were most active in hours after the previous day. In most cases, these stocks move with the news released after the close. These links, as well as others, can be found at http://www.TraderAide.com.

While you’re on the NASDAQ page, be sure to take note of the Pre-Market Most Active list. This is going to be another great source of potential actions for you to consider. An additional source on the NASDAQ page is the NASDAQ-100 pre-market heat map. This is especially useful right at the beginning and for the first hour after the start of the 5 am pre-market trading action.

In both cases, after-hours moves and pre-market moves, the action is often news-related.

An excellent source for this news is MarketWatch. You can find it in a hundred other locations on the net, but I find the MarketWatch site easy to use and, more importantly, easier to find. It’s also less likely to be filled with “non-trading” news that you don’t really need to trade.

Some of the things you want to look for include stock events that happen almost every day, such as: analyst ratings up/down; earnings reports and FDA actions that could include approval, disapproval, or simply commenting on the application.

I also suggest you watch Bloomberg TV early in the morning, before pre-market trading begins at 5 am I prefer Bloomberg to CNBC at this time of the morning for their futures presentation and news broadcast on the bottom of the screen. Once the pre-market opens, I suggest you switch to CNBC simply because they have, what seems to be, a much larger audience. On CNBC, stocks reported or mentioned are often sent up or down, offering great trading opportunities in many cases.

Once the markets open, almost all real-time quotes systems have a built-in feature that will give you at least the top ten most active on the top three exchanges, both winners and losers. Also, they may have some kind of more advanced “filtering”. With RealTick from Townsend Analytics, Ltd, it’s called Hottrend Realtime Radar. You can leave this running all day. Stocks that show unusual volume compared to their historical volume patterns will automatically appear on Radar. It is available for stocks traded on the NASDAQ and NYSE. Check with your provider to see if this feature, or something similar, is offered.

Last but not least, you want to check your Dow Jones news feed for the latest news as of 6:30 am New York time. Sorry” West Coasters, but as the bank robber said when asked why he robbed banks, “Because that’s where the money is.”

Happy trading!

Permission is not required to reproduce an unedited copy of this article, as long as the About Author tag is left intact and direct links are included. Questions and comments can be sent to Floyd at [email protected].

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