Section 4 · Momentum Basics
Scanning for Momentum Stocks
The right filters turn 8,000 stocks into your best 3 setups
Building a Pre-Market Scanner That Finds Real Momentum
A momentum scanner is a tool that filters the entire universe of stocks down to a handful that meet your specific criteria right now. Without a scanner, finding momentum stocks is like searching for a needle in a haystack of 8,000 needles and hay. The goal of pre-market scanning is to arrive at the open with a watchlist of 3–5 stocks that have a specific catalyst, the right technical setup, and the liquidity to trade safely. The five most important filters for momentum scanning are: (1) Float under 20 million shares — small floats move more aggressively on volume. (2) Relative Volume over 3x normal — something is happening today that isn't normally happening. (3) Price between $2 and $20 — affordable for small accounts, still has volatility. (4) Gap up 5% or more — the market is already agreeing with your bullish thesis before the open. (5) A specific catalyst — news, FDA decision, earnings beat, partnership announcement. The top tools are Trade-Ideas (best real-time scanner), Finviz (free, great for pre-market research), and ThinkorSwim's built-in scanner (free with a TD Ameritrade account). Combine scanner results with chart analysis to build your daily watchlist.
3 things to know
A momentum scanner filters 8,000+ stocks to your best 3–5 daily setups using quantifiable criteria.
Key filters: float <20M shares, RVOL >3x, price $2–$20, gap up >5%, plus a clear catalyst.
Trade-Ideas, Finviz, and ThinkorSwim are the top scanning platforms — two are free to use.
Dive Deeper
Momentum Stock Scanner Checklist
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Key vocabulary — tap each card
Practice
Building Your Daily Watchlist
Run Pre-Market Scanner at 8:00–9:00 AM
Before the market opens, run your scanner with all five core filters. Output should be 5–15 candidates. Note the catalyst for each.
Research Each Candidate
For each scanner result, find the news headline. Is it a genuine catalyst (FDA, earnings, partnership) or just price action noise? Genuine catalysts trade better.
Chart Analysis
Pull up the daily and 5-minute chart for each candidate. Is there a clean technical setup — a consolidation, a breakout level, a clear stop? If not, remove it from the list.
Build Your Final Watchlist
Narrow to your 3–5 best stocks. Write the entry level, stop level, and target for each before the open. You are now prepared, not reactive.
Did you know?
Trade-Ideas' AI-powered scanner (called "Holly") runs over 70 simultaneous trading algorithms and historically back-tests each alert before sending it. Traders who use AI-assisted scanning report spending 40% less time on stock selection and 40% more time on execution quality — which is where actual money is made.