good example is in the live room on a GENZ series of winning alertswe posted (4 in a row wins) on Feb 12, 2002. Let's say our sectors opened like this, eg at 9:45 or so the sectorbox may appear like this:
  
Your question as a trader is: a) is the marketoverall bullish or bearish on the opening 10-15minutes? (bearish, also look at the tring value tosee if it's under 1 or over 1, eg <.7 bullish, >1.5bearish)
b) which 12 sectors are the most green(Biotechs, NBM) and most red (Networkers andhardware, GIP/GHA) and most red by 9:40am?
Note that we usually get quick market reversalsaround 9:40/9:50/10am daily.
2) OK You've Identified Overall Market Bias (Long/Short) by seeing if the majority of sectors are green/red percent change fromthe open, and you have Identified which sectors are most green/red of the 6 or so you follow.
This is your Initial Sector Relative Strength profile, your data to work with, thal you moderate all trade entries from.
You are now prepared, say it's 9:40am, and you are:
a) more skeptical of longs than shorts on an open like this (meaning you're likely 10 mainly try 2day high breakouts, intrarangelong entries rare, in NBI sector) and
b) you will look for longs mainly in Biotech sector on this open, and short the other sectors.
Let's look at an example of live calls | made in our live training room Feb 12th 2002, using a NBI sector breakout in GENZ:
This is the 2-day chart in GENZ: Initial longs at 43.6, 44.7, 46.7 for three long wins, and a short call at47.35- for the reversal
BENZ J 25] [irtervaichat =] 29) filly 22. Eals8| 27 S| GRY
 
 
 
 
 
 
 
Copyright 2002 eSignal.volume 250K
 
 
  
 
200K150K100K) dll dul taalIu hy ii, hu, dha | sae ial \ ida i [ (hl | | | | | | | lid Uh k ivi ll tl il I9:00 10:00 11:00 0 13:00 «14:00 15:00 9:00 10:00 11:00 12:00 13:00 14:00 15:002/1102 21202
 
Now how dol scan the market for such a nice string of wins, you may ask?
Well, we are initially biased short overall in the market, with possible longs in biotechs, as they are the strong/green sector of the basket. |knew this going into the open, during our first 20 minutes or so, as biotech sector took the early lead.
| saw both volume and pace in time & sales strong in GENZ, which helped confirm our multiple entries in this powerful stack
Use strong stocks in the strongest relative sector on 2day high breakouts as your key, #1 most-often used long entry Nasdaqdaytrading strategy. You do Not have to wait forever for these two day highs, and if you use the time & sales and volume patterns to helpyou filter false breakauts/double tops, eg by raking it punch through at least .2 to .4 over the high of the previous trading day, on volume,you will have learned the best trading setup | can share with you. These are Much better than intrarange or bottom fish type long entries.Test it yourself. | do, daily
Key learning point: Sector percentages tend to stay relatively constant throughout the trading day, eg the "most green" and "most red"sectors at 9:35 / 9:40 will likely be the sare strongest sectors throughout the day's session.
‘What this means is, (here's another pro tip), the “mast green/most red" sector at 9:40 can lead you to a nice profitable win on an entry at10:15 or whatever, since you know the relative sector strength pattern for the day.
Given the choppiness of the stock charts, it's very irnpartant to know this one data point, that the rank order of sector percent changesfor the outliers usually stays relatively constant throughout the trading day. It's very unlikely for sectors that are the outliers ta changetheir rankingfordering throughout the trading day. Eg if semis and software are strongest sectors at 9:50, they are very unlikely tobecome the weakest sectors compared to others later in the session, they tend to flack together in the same rough ranking
Use this powerful knowledge to help you assess specific chart patterns as they becorne available for entries, rmoderateybalance your entriesand other data points off of the sector percent relative strength scan
Here's the actual sector percent change chart from the open on Feb 12th, note that the sectors closed offat 4prn in the sarne rough order asthey opened, with bintechs the strangest.
 
Ok traders, test this out for yourself- the main point for long sector-based scanning strategies is to continually sort the sector percentchanges from the open and then selectively enter breakouts from arnong stocks that belong ta the “lead sector"
This is a big help if you face the cormmon problem of “ok | see 6 chart patterns that look okay for longs, which ane do | go with?" In thisexample, say you are watching GENZ (NBI) and VRSN CHKP (GSO) and AMAT XLNX (SOX), given chart patterns that are all roughly thesame, you would want to go long GENZ since it's in the strongest sector, thus has the ‘best odds of following through’, Make sense?
Your Own Observations:
Okay, so practice with this powerful technique, it's one of my most important signals in my daytrading entries and exits, as | explain dailyin the live training room. Hope it helps - enjoy!
REST WILL FOLLOW WHEN THE AUTHOR FINISHES AND PUTS IT ON HISWEBSITE!ModuleSeven
Scanning Strategies and Software
Click an each tink for a new daytrading lesson, Be sure to Back tocomplete the trading worksheets and activities for each module DTU CAMPUS MAP
Click on each line for daytracling lessons from thelist below, An underlined link means the content isnow available, Note: click on your browser's“reload" button to make sure you see the latestmodules posted as they becomeavailable..Remember to set your screen resolutionto at least 1024x768 to enjoy DTU.
 
a> GE = Updated pages win last week.
DTU Module 7 Lessons
« Scanning Basics Part 1: Choosing the Types of Stocks toDaytrade -
« Scanning Basics Part 2: Identifying Signals vs "Noise" - WhatShould Get your Attention?
¢ Scans for Volume Patterns - What Volume Criteria isImportant?
« Scans for Percent Gainers - When Do We Look for NewLongs? - New!
« Scans for Percent Losers - When Do We Look for NewShorts?
« Scans for Premarket Gaps - Gap Scanning Strategy Explained
« Sector Strength and Weakness: How to Monitor and Trade offof the Signals
« Scanning for Sympathy Moves, Bounces & Breakouts withinSectors
« Scanning for 2-Day and Intraday Breakout & Breakdown PlaysUsing Candlesticks
« Scanning for Resistance/Support Patterns Part 1: Using theCOMPQ 2-Day and 10-day Chart
« Scanning for Resistance/Support Patterns Part 2: IntradayConsolications & Breakouts
« Scanning for Cup Pattern Breakouts - How to Evaluate theLikelihood of Success
« Scanning for Ascending Triangles, Pennants and Trends
« Scanning Software: What to Look for
« Scanning with Your Eyes Wide Open - What to Look at EachTrading Day
« Professional Scanning Techniques - Spotting TradingOpportunities Quickly> Click here for Powerpoint viewer programClick here for MSWord view progam (3.5Megs)
« Your Personal Daily Scanning Log« Scanning Successfully: What Types of Trades<p Work for You?« Matrix of Sector Scans and Trading Setups« Results and Risk Management: Scanning bythe Numbers
e "Scan It, Trade It, Profit, andRepeat"
« Your Radar SpotsHostiles/Friendlies - Whatdo You Do?
« Separating out the Signal
« Scanning Profitably: APersonal Action PlanModule Advanced Scalping Plaoe ping PlaysClick on each tink for a new daytrading lesson. Be sure to Back to.complete the trading worksheets and activities for each module (DTU CAMPUS MAP
Click on each line for daytrading lessons from thelist below. An underlined link means the content isnow available. Note: click om your browser's"reload" button to make sure you see the fatestmodufes posted as they becomeavaifable..Remember to set your screen resolutionto at least 1024x768 to enjoy DTU.
MM = Updated pages win last week.
 
DTU Module 8 Lessons:
« Precision Daytrading: Scalping Explained from a ProfessionalTraders’ Perspective
« Scalping Goals, Objectives, Risk/Money/Trade Management:An Overview
« Stock Selection for Scalping; Scanning Strategies for ScalpTrades
« Trading Styles Compared: 1) Core Daytrades: 2 to 20 minutes,
« Trading Styles Compared: 1) Core Daytrades: 2 to 20 minutes.2) Scalping: up to 5 Minutes
« Trailing Stops, Stop Losses and Exit Targets for ScalpingNASDAQ tech stocks
i « Scalping in Size: Trading 1K-2K shares for profit
« Become a Market Maker: Scalping by Buying at the Bid andOffering at the Ask
« Decimal Trading and Scalping: How to Trade the DecimalizedCOMPQ
« Types of Scalping: Channel/Consolidation Trades vs BreakoutScalp Runs
« Scalping and Chart Patterns Part 1: Using Stochastics, MA andCandlesticks
« Scalping and Chart Patterns Part 2: Using the TRING, COMPQand Sector Charts to Scalp
¢ Scalping and Time & Sales Part 1:- Using the Tape to Scalp
« Scalping and Time & Sales Part 2- Assessing Buy/SellPressure
« Scalping and Time & Sales Part 3:- Trade Entry and Exit Usingthe Tape
« Scalping and Nasdaq Level 2: How to Use It Correctly (and,How to Not Use It)
« Order routing challenges and strategies for large share sizetrades
¢ Scalping with Fibonacci Levels & Retracernents> Click here for Powerpoint viewer programClick here for MSWord view progam (3.5Megs)« Nasdaq Daytraders' Scaiping Journal« Worksheet for Trade Management: Position<B Size and Stops« Stock Selection Criteria for Scalping: TheMatrix
« Your Personal Scalping Trader's Action Plan:The Next Steps
« "A Quick Scalp Here, a Quick ScalpThere"
« Scalping in Action: Tracking YourProgress
« Taking Early Profits on Your ScalpingTrades
« Position Sizing in Scalp Trades: OrderRouting and Trade Size<|end|>