Day 8 – Advanced Market Scanning & Trade Selection




Introduction

By now, you have a complete trading system. But even the best system won’t make money if you feed it low-quality trade ideas.
In professional trading, selection is everything — you want to hunt only the highest probability setups while ignoring everything else.

That’s exactly what Day 8 is about:

  • How to scan markets efficiently.

  • How to rank opportunities.

  • How to avoid “setup chasing” and focus on A+ trades only.

By the end of today, you’ll have a repeatable scanning process you can run in under 30 minutes each day — giving you a shortlist of the best possible trades for tomorrow.

Step 1: The Purpose of Market Scanning

Market scanning is the trader’s filtering process — like panning for gold.

  • The market has thousands of stocks, futures, forex pairs, and crypto tokens.

  • 90% of them will not be worth trading on any given day.

  • Scanning removes the noise so you can focus on the 5–10 setups that matter.

Think of it this way:
If you hunt for trades all day, you’ll end up forcing trades. If you scan once a day with a plan, you’ll act only on quality.

Step 2: The 3-Level Filtering Method

This method breaks scanning into three layers — each cutting out the junk.

Level 1: Macro Filter – Market Direction

Before looking at individual charts, ask: What’s the big picture?

Example checks:

  • Trend: Is the S&P 500 / Nifty / main index bullish, bearish, or sideways?

  • Market Breadth: How many stocks are advancing vs. declining?

  • Sector Rotation: Which sectors are strong/weak this week?

Why this matters:
If the market is trending up strongly, you’ll look mostly for long trades.
If it’s falling, you’ll focus on short trades.

Level 2: Technical Filter – Pattern Hunting

Once you know market direction, scan for technical setups that match your system.

Examples of filters you can use:

  • Moving average alignment (e.g., 20 EMA > 50 EMA > 200 EMA).

  • RSI oversold/overbought conditions.

  • Price near key support/resistance.

  • Volume spikes above 150% average.

You can set these in scanners like TradingView, Finviz, or Chartink.

Level 3: Trade-Readiness Filter – Risk-Reward

Even if a stock looks good technically, skip it if the risk-reward doesn’t work.

Checklist:

  • Is the stop-loss level clearly defined?

  • Is there at least a 1.5:1 reward-to-risk potential?

  • Is the setup clean without messy price action?

Step 3: Building Your Daily Watchlist

Your goal each day:

  • Scan in the evening (post-market).

  • Build a Top 5–10 Watchlist.

  • Only trade from this list tomorrow.

Example Watchlist Table:

SymbolSetup TypeEntryStop-LossTarget 1Target 2
AAPLBreakout$190.50$187.20$195$198
TSLAPullback$250.00$245.00$260$265

Step 4: Using Sector Strength to Your Advantage

Professional traders don’t just pick random stocks — they trade leaders in strong sectors.

Steps:

  1. Identify top 3 performing sectors of the week.

  2. Find the 2–3 strongest stocks within those sectors.

  3. Look for setups in those leaders.

This increases your odds since strength often clusters.

Step 5: Morning Pre-Market Scan

A quick 15-minute pre-market check can save you from bad trades.

Check:

  • Any big gap-ups/downs in your watchlist stocks?

  • Any overnight news affecting your setup?

  • Any sudden market direction change?

If conditions changed, remove the stock from your plan.

Step 6: Avoiding Information Overload

New traders make the mistake of:

  • Using too many scanners.

  • Watching too many stocks.

  • Reacting to every tiny market move.

Instead, discipline your inputs:

  • One macro check (index trend).

  • One main scanner for setups.

  • One shortlist for trading.

Step 7: Your Day 8 Practice Plan

  1. Pick one scanning tool (TradingView / Finviz / Chartink).

  2. Set up filters that match your strategy.

  3. Run a post-market scan today.

  4. Create your Top 5 Watchlist for tomorrow.

  5. Tomorrow, only trade from that list — no chasing random moves.

Common Day 8 Mistakes to Avoid

  • Scanning all day long — wastes time and encourages overtrading.

  • Changing filters daily — destroys consistency.

  • Trading everything that moves — instead of sticking to your plan.

Pro Tip:

A good trader knows when not to trade.
If your scan shows nothing high-quality, do nothing. Capital saved is capital earned.

End of Day 8 Summary

Key Lesson:
Your profits don’t just come from how you trade, they come from what you choose to trade.

With a disciplined scanning process:

  • You’ll find better setups.

  • You’ll avoid random, low-probability trades.

  • You’ll have more time for analysis and improvement.


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