3 steps to trade low-float momentum stocks using Edgewall

Welcome to Edgewall! In this tutorial, we will take you through three easy steps to use the platform and start trading low-float momentum stocks like a pro! By subscribing to Edgewall premium, you’ll be able to discover potential winners before other traders and to seize opportunities before or as they arise in the market.

Step 1: Find “hot” momentum stocks and potential winners

We have developed a proprietary and back-tested algorithm that screens markets (NYSE, NASDAQ, AMEX) for you from pre-market and throughout the session to find the best (low-float) momentum trading opportunities. Our algorithm includes many technical and fundamental analysis parameters which allow us to identify stocks with the highest potential of “running”.

• Long signals: Once a stock has been identified by our algorithm, it is added to our dashboard along with a “Long Signal” status with a purple colour tag. By clicking on the symbol, you will be able to easily access key research data such as technical and fundamental metrics, chart and newsflow (highly important when day trading momentum stocks). The very first alerts usually come during pre-market around 7.AM (US).

An example of Long signal alert notification. The stock $SIDU was first identified by our algorithm at 09.13 AM.

In addition to providing the alert via our dashboard, you can opt-in to receive e-mail notifications via our profile settings. We also have a telegram group and discord server for our premium users from where you will get notified each time an alert is posted. Please see the “Social” section in the user dashboard for the links to join!

• Follow-up alerts: when steams pick up on a certain symbol, we will send follow-up alerts marked “Momentum [n]” — with n being the follow-up alerts notifications count — with a green colour tag. These follow-up alerts are here to confirm that the stock is experiencing a high momentum and should serve as an indicator prioritise alerts and trading decisions. We also compute the potential return achieved since we provided the first alert in the potential return column. See an example below:

An example of Momentum alert notifications issued for symbol/ticker $SIDU. As you can see above, if you would have entered the trade using the first “Long Signal” at 09:13 AM, you could have achieved a 23.10% return by exiting the trade at 09:22 AM. We issued several “momentum” alert notifications in the meantime [4] as momentum picked up steam on the symbol

• Newsfeed: in momentum trading, low-float stocks have the highest potential to go parabolic and make huge gains as they are extremely sensible to demand and catalysts/newsflow. In case of a relevant news posted for a stock, you’ll be the first to know so that you can decide rapidly on which alert to trade. You can access newsflow for every alert via our “Newsfeed” tab or by clicking on the symbol/ticker or directly by clicking on the Newsfeed icon.
• Risk-levels: we provide you with AI-powered risk-levels for each alert. Their objective is to give you an indication on the risk associated with opening a position. A very high risk-level indicates that the stock price might reach its peak soon or that the momentum is expected to lose steam. Our risk-levels also include a time component and increase as the trading session advances.
• Dynamic Pullback indictor: we recently introduce a dynamic “Pullback” alert status to help you quickly see price pullbacks. This feature was requested by many users to be able to prioritise alerts and trading decisions more rapidly:

As you can see on the last alert notification, $SIDU had a 34.48% price increase since the firs long signal and experienced a pullback at 9.35AM.

You should now have all the information you need to use the dashboard and get ready to enter a trade! Of course, we recommend you to do your own research and to analyse any of the alerts provided before opening a position.

Step 2: Set-up your trades and enter a position

After accessing our alerts, either via dashboard or via our premium social channels, the next step is to decide on a potential winner. As mentioned above, we tend to suggest to look at potential catalysts and news on each symbol via the Newsfeed section or column. News like FDA approvals, M&A, patent-approvals typically translate in high price increases. Again, the higher the demand on a low-float stock, the higher the price movement and return potential.

Setting up your trades: it’s essential to be disciplined and to set-up your trades in a non-emotional manner when trading momentum stocks. We suggest to set-up the following:

1. Take profit: setting up a trade profit will allow you to secure gains during the price uptrend. Traders typically set-up take profits using short-term/intraday resistance level or using Fibonacci extensions.
2. Stop-loss: setting up a stop-loss order is highly recommended to protect your capital. You stop-loss should be low enough to allow for potential small price pullbacks, else you might be out of the trade prematurely. Setting your stop-loss orders depend on your risk tolerance, however you can look at short-term/intraday support level and short-term moving average (MA) lines to set them up. For day trades we will often put our stops under the 9 EMA or the 20 EMA.

• Start with small positions and gradually increase: enter new trades with conservative positions and increase as momentum picks-up. Our “re-alert” function and our risk-levels indicators are useful to get an idea of when to enter, increase your position, take profit and exit a trade.
• Price monitoring: once you have entered a trade, make sure to closely monitor the price (on the 1min, 3min or 5min chart depending on volume) and be ready to take action as the trend evolves. You may want to increase your position in case the price action is strong or to secure gains and repeat the operation…!

Step 3: Secure profits, exit the trade and repeat the process!

• Secure your gains: as momentum can reverse quickly, make sure to gradually take your gains. Our risk-levels are a good indicator of when to exit a trade. The higher the risk-level, the closer we anticipate the stock price to have reached its limit based on our back-testing analysis and experience. Also remember to set-up profit taking orders as outlined in Step 2. In addition, we recently added a “Pullback” alert status enabling you to identify current price pullbacks and which can be useful to decide on when exiting the trade.
• Do not be too greedy! It is better to secure multiple small gains than risking your capital by holding a position too long and see the trend reverse.

Be disciplined. Non-emotional. Do not be too greedy. Repeat the process! We provide alerts on a daily basis so there will be plenty of opportunities to make money.

Additional information:

• We recommend to take a look at the 1-min, 3-min or 5-min chart when entering a trade and monitoring a position.
• Momentum trading is relatively uncorrelated to macro/global market trends, hence we usually have a high and consistent number of alerts and opportunities to provide you with. However, do not be surprised if there is less activity on the platform certain days when the market is experiencing a correction or bearish phase.
• While our process has been back-tested and used by multiple traders worldwide, we cannot guarantee profits. However, our alerts and process has generated a solid track-record over time (see the “Stats” section of the dashboard).

You should be all set to start trading using Edgewall!

We highly recommend you to join our discord server, premium group on telegram and twitter to engage with other traders, share tips and experiences, ask questions and let us know your feedback!

• Discord: https://discord.gg/PrY9hVuN9k
• Twitter: https://twitter.com/Edgewall_