Using a First Green Day Scanner to Trade Stocks using this Pattern
It can be difficult to find a First Green Day Scanner to help you identify what is one of the most important patterns in technical analysis. It’s also one of the most commonly misunderstood and misused patterns out there. In this article, we’ll do our best to show you show how you can use a First Green Day Scanner rather than trying to do so manually.
We’ll also explain what it means to trade with the First Green Day pattern, and walk you through some examples of how you can profit from this pattern using software that utilizes it.
What is The First Green Day Pattern
The idea of the First Green Day involves buying a stock when it closes at its high point and then holding on to it until the next morning. Hopefully, after that time passes there will be a sizeable rise in price which we would then sell.
How the First Green Day Pattern Works
A first green day pattern is a pattern that appears on the daily charts, not the hourly or minute candles. In a daily chart that has a long-term downtrend with many red candles, it then suddenly turns green. It can also show up when a stock moves sideways for a period of time.
Why do you Trade the First Green Day Pattern?
The strategy is great because it helps you capitalize on the inefficiencies of the market. For example, many people miss out on this when trading these stocks.
When people start trading before the market opens, they inevitably create a sense of supply and demand which then leads to sudden price increases - making them perfect opportunities for traders to make money.
Difference Between First Green Day vs. First Red Day
A First Green Day means the stock price has risen for that day after a period of red days.
A good strategy is when first green candle is seen on the daily signifying that it is a bullish market and a good time to buy low because this will allow you to profit from selling higher later on.
In general when there's a red candle, either on the daily chart or another time frame, it can signify an overpriced value, which indicates decreased demand or larger supply than anticipated.
When trading the first green day pattern, there are some factors to take note of:
- A good news catalyst is necessary for this type of trade to work well.
- There should be plenty of volume in the stock as well and it needs to stay at this high level before moving forward again.
- It would also be good if we set up a support level so that it can continue its next move upwards.
Our goal is to make this trade as easy for you as possible. You do not need to get mixed up in the beginning move which can lead to unexpected volatility.
Yyou are able to ride out a bullish trend and take advantage of increased upside potential.
When you trade this pattern, the stocks you're most interested in are typically lower-tier stocks. You'll need to find ones with a small float so that when you increase demand for them, it can have a larger impact on their price.
The increased volatility from doing so is well worth it if it increases your chances of making money in the long run.
Volatility is an unavoidable risk when investing in stocks. A stock's price may stay high for some time before being followed by a decline - but that doesn't mean it won't fall again!
In fact, history has shown us that many stocks are followed by declines in prices after their initial rise - so don't count out the possibility.
Use a First Green Day Scanner
A first green day pattern is an unusual occurrence for the stock because it has been trending downward for a while. The news may have leaked out and people are jumping on board or this may be related to another company that just happened to make gains today.
Confirmation will lead you to success. To find it, use a reliable stock scanner tool. Don't gamble your money by guessing which stocks are going up when there are tools for finding out for sure.
At the time of writing this article a good option to get a functional First Green Day Scanner is to code it yourself. You can see some example code here.
Some scanning tools can implement this feature, for example here
How you can Trade Stocks Using the First Green Day Pattern
The idea of a green day is pretty simple - buy a stock when as it closes at the end of a green day, keep it overnight, in the expectation that it will rise higher the next morning.
If you wait till the following day after the first green day then a good idea is to wait until the next afternoon.
Using these afternoon patterns will make discipline easier. When stocks break through the morning highs, traders are afraid of missing out on gains.
But seeing this same pattern during the following day means there's still money to be made - it's not just a one-time thing.
You might need to incorporate a VWAP Scanner to give you extra information
Here are a few ways for trading this pattern:
Examine for Big Percent Gainers
Occasionally, we get forewarning about the first green day pattern. Maybe it’s something important like an earnings report or other event or anomaly.
It should always show up if you have a top percentage gainer scan because there’s a high probability it will mean good things for you.
Check it’s Authentic News and a Real Stock
You can't just rely on a tweet to keep up the market interest for long.
Wait for the Afternoon
One of the most important factors we consider when it comes to stocks that have been doing well is how much attention they receive after a major announcement.
If people are still paying attention, it shows that there may be opportunities for growth in the future.
It finishes at the High of the Day
If stocks end the day at a new 52-week high or an all-time high it means that they are still rising and might hit even higher levels after market close.
It also ensures that there is an army of people who will wait until they can sell the stocks near their purchase price instead of risking it by selling at a lower price later.
Wait for a Pullback
The panic you feel when you wake up is what a trader feels during the morning. What they are doing is taking their profits before others do, which pushes the stock prices down, triggering stop losses on the way so even more traders will sell off their holdings.
This can sometimes create an opportunity for those who are looking to buy low but it doesn't always work out that way.
The Bottom Line on a First Green Day Scanner
In a bull market, solid news and high volume are the keys to success. Try and setup a First Green Day Scanner that will help you identify this pattern. And then trade it accordingly, don't rely on it just by itself, use other indicators as well.
Have you traded using a first green day scanner? You can tell us below