What's up everyone? All right? So I thought I'd Come on here, it is 931 and it's Saturday So the Bell has not just rung and I'm not gonna start trading. However, if it was a Monday through Friday and that would I would be probably trading and in some instances I may have already taken my first trade pre-market So the topic of this video is when do I trade pre market and why do I trade pre market So how do I make the decision that this is a day to trade pre market Because many of you guys know that historically I don't trade pre market and for the I mean basically for my entire career, I've avoided trading pre market although there have been times here and there where I have and you may have noticed in the last few weeks that I have traded pre market on probably probably more occasions than in like the previous five years combined. So what's happening right now that's making me wanna trade pre market? All right. So it's 932, You know, let's pretend the bell has just rung.

So what would have needed to happen this morning For me To you know, take a pre market trade. So basically in a typical market, an average market kind of. You know the way things were. Maybe a year ago or six months ago, pre market stocks are gapping up.

We use our Gap scanner so we can see that stocks are moving a little bit higher. We we understand that something is driving that momentum. Usually it's a catalyst of some type. Maybe the company has put out earnings, Maybe they've put out some press release about a new contract? you know, whatever the case is.

But generally the pre market volume is very light, the spreads are very big, and the patterns are kind of. They're not very clear because when you only have a hundred thousand shares of volume, usually you don't have a very clear pattern, and usually the gap errs are only between five, ten, maybe fifteen, or twenty percent at most. So you don't really have a lot happening pre-market and so as a result people just sort of wait till the bell rings and then once the bell rings. That's usually when we see the market really pick up, that's where we see the volume pick up and and generally it's at 9:30 when the bell rings that stocks start reacting to the news that came out either after hours or pre market.

It's not usually pre market that we see really big moves, except for number one when the news catalyst is really, really strong. So if you have a stock that puts out a news catalyst like they just cured, you know if they just came up with a true vaccine for Kovan 19:00 that stock is gonna rip up pre market. Why? traders are gonna see that opportunity and they're not gonna wait for it. It's as simple as that, they're gonna want to jump in quick.

So if the news catalyst is really good. even in a colder market you can see more volume and you can see more opportunity. So generally my rule of thumb is that I don't want to trade and here's girl. and if you can, sear.

So usually I don't want to trade pre market unless there's either a really good catalyst or really good chart patterns or a decent amount of volume unless we're in a you know, really hot market. And yes, Joseph this is live it is Saturday morning at now 9:35 a.m. and I'm giving you kind of a little weekend content about how I make the decision of whether or not to trade pre market because I've noticed in the comments a lot of people asking about hey Ross you know I you've taken some pre market trades recently. how are you making the decision that this is a time to trade pre market and the short answer is trade to market you're in.

If the market is really, really hot, then you'll notice that stocks are moving up more and more pre market on more and more volume and and entry and the traders are so eager to jump into the next opportunity that stocks aren't waiting till the bell rings, right? So that's that's the that's the short answer girls. Good show, just a little bit. All right So but there's risks with trading pre market, there's no doubt about it. So I'm going to show you a couple of examples of some stocks.

I Had some pre market moves, so this is actually just yesterday. Friday on CT IB Now the move started after hours. It's Chinese stock. Recently we've seen a lot of momentum in Chinese names and you can see if I zoom in on this right here.

This after hours was actually a really clear pattern right there. That was a clear breakout pattern and it resolved very well from 580 all the way to 687 80 almost eight dollars after hours. So it closed after hours and then pre market the next day. it just continued ripping.

Now we hit a high of 1250 I'm pretty late volume and then pulled back, popped up for a second drop down and my biggest trade on it was actually the break of View app right here to up here and I bought 17,000 shares of that and made almost $17,000 It went from seven up to eight and then to a high of 824. So this one I didn't trade pre market, mostly because pre market it was already kind of stair stepping down. It was looking a little bit bearish. it just it wasn't looking quite right.

Dpw earlier in the week if we look at this one. So Dpw on this day I did trade pre market. so why would I trade this pre market? The stock is squeezing up. it's got a pretty decent amount of volume.

At this point it's up. and more importantly than the volume, it's up. what like 200% It's already up a lot and it's one of the leading gap errs in the entire market. I Look primarily at rate of change.

so if I see a stock is up 150 percent or a hundred percent regards the volume, that tells me that something is happening and I should look closely at it because those are the type of stocks that they can go up from 100 to 200 300, 400 percent. And even in the last week we have seen multiple stocks make 100, 200, 300, 400, 500 % moves. Come on girl, let's go this way. So how'd she go? Yeah, we're gonna put it round me.

See you later Bye girl, bye girl, bye back home I'm gonna grab one thing. So yeah. so anyways, you know this stock was obviously holding up really well. it was consolidating free market and so it made a hundred percent sense to get in right there, right? It's a clear pattern now usually and I would say you know we go back four or five six months.

Usually pre market we wouldn't see really good clean patterns like this. It would just be really uncommon. but right now we're the market where traders are being super aggressive. things that are you know, starting to pop up.

People don't want to miss the move and so what do you? You basically have our traders out there that have FOMO they don't want to miss the opportunity and so as soon as something starts popping up even pre market they're jumping in it and you can notice that you can see that very clearly just by looking at the chart right? So that's the reason that I would go ahead and take the pre-market trade. We can look at a couple other stocks wafu this one was a couple days ago on Thursday so this one a pre market I didn't trade I mean I certainly I guess I could have traded I wasn't up early, this was like 7:30 in the morning so I wasn't even like in front of my computer at this time. so you know could I have taken that trade? Yeah I guess so but I I didn't I just left it alone so that one again cuz I wasn't up. so down in this area this wasn't a super clear pattern.

so on this one I waited again until the bell rang and then took a break of V web. And it just happens that on this day even though this was up a lot that chart, it just wasn't really. it just wasn't really quite dialed in like it didn't look quite right I am RN This one made a big move yesterday during regular trading hours so there wasn't any real like this was. This is we usually what pre market action looks like.

it doesn't look that great. You know it's kind of like you know you can see the stock is popped up a little bit. It's kind of consolidating, but this isn't something that you would trade pre market. there's just it's not up 100 percent.

It doesn't have anything that really is super interesting. So on a day you know where if this was our leading gapper up like 3% or 5% or whatever it happens to be from the previous day's close I would say no I'm not gonna trade that it really doesn't look that great. So the decision to take a pre market trade is oh sorry what this the way this yeah I see I see sorry I was on the wrong window so let me just go back on these. So the way I would make the decision would be if I saw some really strong action pre market so Dpw and I can go to this one I'll just go back in case you missed it cuz the way my screen share was set up.

so that was that that dip trade right there. first five-minute candle making you high right when you've got a clean chart or you have something that's already up fifty seventy five, a hundred percent and it's one of the leading gap. errs. lots of traders are gonna be watching it waiting for it to start to open up.

so as soon as it starts to open up, that's where I would jump on. So something like this if I'd been watching at this, time, I would have jumped on it right down here even though the volume might have been light in this candle which it was I didn't jump on it only because I wasn't sitting in front of my computer 6:30 But this was a totally good setup. The first pullback and it rips higher. Why? At that time, it was probably the leading gap in the entire market.

either the first, second, or third, it had a news catalyst. It doesn't have to be an amazing news catalyst, but it's just there's a news catalyst so we understand. Okay, well, obviously someone's responding to that. That's why it's moving up, right? So that that's basically how we put the pieces together of making that decision of Okay, today's a day where I'm gonna go ahead and take that pre market trade or you today I Really don't see anything that looks super good.

It doesn't cost anything extra to trade pre-market at least with my broker. All of my hotkeys still work so I can trade exactly the same as I would during regular trading hours. It's but it's riskier for a couple reasons. And number one and let me switch back here to let's See to this window.

So number one: sometimes the moment the bell rings, all of a sudden the stock will drop and this this is a slide for my classes. But what you can sort of see here is that the second the bell rang, this stock actually was pre marketed. A dollar Twenty eight the bell rings and it's down at 70 cents. So it actually just like gapped right down at the Open.

So why would something like that happen? In my opinion, something like that would happen because someone had been holding the stock for a while and actually put out an order to sell it at at the open. right? So you know they as soon as the bell rang, their order to sell is executed and flush down. it goes right at the gates, out of the gates. Now a lot of times when they do that they pop up.

but if you were holding from pre market into the open then all of a sudden you get caught in the trade and you're You're just either having an average down or take the loss which is not a good situation. Another risk factor of that's a risk factor of holding between 929 931 Holding through the open. A risk factor of trading pre market is that additional news can come out. You can have secondary offerings and things like that to come out and if you have a stock that is up, let's just say for instance, we had one.

Was it Wafu? I Think it was Wafu. The stock was up like 400% and had no news. So the problem with the stock like that now in the classes I teach that we always prefer to have a catalyst. However, if there's no catalyst than we would consider the breakout to be purely technical.

You know we don't know what started the breakout, but the fact is, the stock went from six dollars to fifteen. That's an opportunity regardless of the news. But what it means when there's no news is it? Inherently there's more risk. There's more risk.

Number one, that the stock could get halted and the exchange Nasdaq could ask the company to provide more information. The company provides more information. They say we have no reason, there's no material changes. there's no reason for our stock to be up 300% And you know what usually happens when the stock resumes from the halt, it opens down 50 to 70% So you know if you put $10,000 in and all of a sudden lost 50% of that, that's a $5,000 loss.

You know, multiply that out to taking a $50,000 position or $100,000 position. And now with these types of stocks with no news, you do have a lot more risk. Stocks, even with news, can get halted on T 12, so it's not like it eliminates the risk completely. But it's certainly a higher risk when you have a stock up four hundred five hundred percent that has no news.

But that's exactly what happened with Wafaa and it's not gonna Haul - so you know it's and and and one of the ways that I mitigate that risk is by generally taking quick trades. So because I'm in and then I'm out and then I get back in and I get back out. you know I minimize the amount of time I have in the trade because your exposure risk is it's sort of how much money you have and then how long you're holding the position. If you're holding the position for hours and hours and hours.

it's just inevitable that a certain point you could have the misfortune of you know, a stock that ends up a stock that ends up popping up and dropping right so or sorry I was just switching my layout there. a stock that pops up and then gets halted on a T12 or halted pending news and the company comes out with news or something like that. So trading pre market isn't without risk I Usually wouldn't trade pre market, but when the market is really, really hot. Alright, so think about this for a second.

when you have five ten days in a row where as soon as the bell rings, you see a stock rip up out of the gates. 50 60, 70 %? Don't you think that some people will start to think, hmm, maybe instead of waiting for the bell to ring, I should take a position at 9:15 right? And so some people naturally start to think that and then before you know it, at 9:15 you're seeing stocks run up before the bell and then sometimes even by the time the bell rings, they'll continue higher. But it gets to a point where so many people are starting to buy pre market that by the time the bell rings what happens, they just fade. And so when you get into that type of place in my opinion, sometimes the only opportunity becomes pre market and it starts to get a little frustrating because as a trader, you know who doesn't want to wake up at 6:30 Eastern Standard Time I Don't really want to get into trading pre market I don't want that to be my my routine.

You know you obviously inherently have more risk free market just with news coming out and with often the spreads are a little bit bigger, the liquidity isn't quite as good. Although on some of these that have had four or five million shares of volume, it's been fine. But I you know I don't want to get into that. But the fact is, when the market is really hot, traders are gonna jump in sooner.

and sooner. And sooner and sooner. And so you either make the decision to jump in with them when you see the stock starting to open up when it's up 100% regardless of the volume, it's a second, third, leading gap or it's the leading gap or people are gonna watch that they're gonna see it and they're gonna jump on it so you know you're either going to be jumping on with them Or you're gonna be missing the momentum. And you know for me I hate the idea of missing missing that momentum I mean that's one of the big challenges for me.

Is that feeling of like okay I want to try to capitalize? And that means sometimes I have to just be willing to trade a little outside my my preferred strategy. So yeah, it's my preferred strategy to not trade pre market. It's my preferred strategy to only trade stocks that actually have breaking news like some type of catalyst. But if you five days in a row see a stock with no news that rips up 500% and you don't trade it, you feel I feel like I'm leaving so much money on the table I'm missing an opportunity.

So rather than miss the opportunity, get frustrated and then you know, take that frustration out on a trade or whatever I'm just gonna keep trading these opportunities if it means I trade pre-market on some of the trades I'll trade pre market if it means sometimes I'm trading a stock with no news I'm trading a stock with no news What? I'm accepting that higher level of risk I may mitigate that risk by taking really, really good quality setups, by holding for shorter periods of time, or maybe adjusting my share size or maybe in the case of this current market I Take the risk knowing that you know. Worst case scenario one, this is that it gets halted on T12 or something like that or halted pending news and I'm I'm caught holding a big position, but given the profit that I've had in the last few weeks, I might be willing to take that risk. and I think right now I am given the fact that although that risk is there I still think it's relatively low you know and you could probably I mean certainly the more volume you have on the stock during the day like a stock that has by 9 by 10 a.m. fit 1015 million shares of volume.

I'm gonna feel better about that probably than a stock like Duo which you know even duo didn't get halted. which is I mean if this didn't get halted, this went literally from ten dollars to a hundred and twenty nine dollars on very light volume. Was this an opportunity? Absolutely. I didn't trade it.

Now this was a time of day where I was already done. But and you know this was an opportunity. We saw something similar on winds WI NS We saw something similar on LT RP B. So we are seeing some of these moves and it's opportunity.

Its volatility. volatility equals opportunity. Some are going to be more difficult to manage the risk on than others, these at the price range and the spreads. For me, we're too difficult to feel that I could manage the risk, but something like Wafu totally okay with I was fine with trading that and and did okay on it.

ir m and r IM n r what was it IM r n this one Not a problem again popping up but the spreads were not as bad. this one had a day back here. a little bit of action, which day was it? This day right here started to open up. I actually chased this one.

I got in you. I was buying it high but it was starting to rip so you know starring a rip it's starting to open up I Jump in high, it squeezes up, it pulls back that break of view app set up. there goes from 10 all the way at $28 and I left a lot of money on the table on this one because I stopped trading it at like 1:30 in the afternoon before it made that final breakout. The fact is, we're gonna probably look back and say this is one of the hottest periods in the small cap market in in years and we'll be looking back at stocks like these and that made intraday 3 400, 500 % moves and you'll think man, you know I wish something like that would happen today because today I'm a better trader than I was when this happened.

You know every day you trade you get a little bit better and you'll think boy the next time I see something like this I'm gonna really try to capitalize on it so maybe that means trading it pre market. Maybe that means being a little more aggressive on dip entries near the V whap? Maybe it means being a little more aggressive on breakout trades just given the amount of volatility. And maybe you're a trader who got caught buying too high on it and stopped out and got on the wrong side of it. And from that loss can also be a lesson to help you be a little bit better the next time one of these come around.

because the fact is, although we're in a really hot period of momentum right now, it's not gonna be the last period of momentum by any means. So learn from it. Learn this kind of pattern of how trades pre market can start to form, how setups can start to form, when pre market is is worth trading, when it's not worth trading, you know, what stocks have the potential to make these really big moves, etc, etc, etc. You want more? So anyways, that's that's all that I Really wanted to talk to you guys about.

Give you kind of a breakdown of you know, trading pre market I Know you guys have seen me take some pre market trades here in the last few weeks. I I Probably will continue to take some here and there in the coming weeks again as I see fit I mean based on based on the market that we're in trade, the market you're in If you're seeing stocks ripping up pre market, day after day after day, then you're kind of leaving money on the table by not trying to take advantage of that opportunity. But again, if you prefer, it's up to you. You guys have to trade as you wish based on your risk tolerance.

I Can't tell you what to do. You've got to make the decision for yourself and you should never be blindly following me or anyone else. This is educational. This is me talking about what I Do what? I see what's worked for me? but I want you to, you know, own that, you know and really try to do it yourself.

Own the decision. Alright you guys. So and that is about it for me. and I am let's see.

I'm gonna put up. let's see. um I'm just gonna put this up here. So which one is this? Mmm, that's interesting.

Hey let me switch to here. Yeah and thank you guys for tuning in here for this livestream. Looks like we've got a pretty good turnout which is great I really do appreciate that. Hey I just want to grab one thing so I'll leave that chart up.

How do I cheat? Jason says how do I choose an ECM I'll do a little Q&A here so ECNs are its It's how you route your order to the market. So generally speaking, I'm gonna wrap my orders not through a smart route, but to a to a direct ECM So I'm gonna do direct direct routing. Direct access we're having is what we would typically call it. So in the case of my trades for the last few weeks, I've been using Nasdaq for my route.

It's fast I like Nasdaq And so it's the route that I that I would use. Some people prefer ARCA some prefer Ajax some like bats. Ultimately, I would say anything is better than smart routing because if you're smart routing, what you're gonna find is that you're just gonna find again and again again that orders are gonna be a little bit lagged. so sorry.

I'm just putting my disclaimer up there for you guys. So yeah, I would personally avoid using smart routing I would try to direct route if you can, but beyond you know I just I Haven't found a huge difference between a stack and ARCA or edge. X and Bass. All direct are best if you use a smart route.

Smart routes usually are smart for the broker, they give them a little, they route them for their advantage really more than anything. I've never once in my entire career found that a smart route was faster than a direct route. Not once. Now with Lightspeed you can do something that's called a super smart route which is kind of cool if you want to.

It costs you more money, but you can actually you send it if you have it. Let's say a 10,000 share order? You can. It's you fan the order out so you can send more so you can send it here. You go so you can send it to four different ECX Say you could send? Basically you split.

It's a super smart route so it takes the ten thousand share order and it divides it into for twenty five hundred share orders and sends it to Arkin as Dak Bats and Edge X But instead of paying one fee, you pay one two, three, four commissions because you sent four different orders. So every time you do that, your Commission's are four times higher. So it's also smart for Lightspeed because they get more money I I Don't do that I Don't know. but so what? Basically, when you get your fill and light speeds regulated, they're in there in Manhattan they're there in New York City They're uh, they're regulated.

They're uh, they're they're the real deal. They're not an offshore broker. That's it's. all gone.

Oh God. see. Oh god yeah, you know it's really sad. Okay, so anyways, so that's super smart, but that's not what most people would be thinking about when they talk about smart routing.

All right you guys. So that's it for me. I Just want to come on here and give you a little kind of you know two cents about trading pre market and again trading without news. You know, trading pre market and trading stocks without news.

both carry risks. However, there are times can you throw that away? Yeah, bring that to the trash. Please thank you. So there there's gonna be times where it makes sense to take that risk, right? You know? And again it's You have to be comfortable with the risk.

But I'm comfortable with the risk. So I hope this has been helpful for you guys. A little 30 minute stream here so it's 10 a.m. Typically I'd be hopefully in in good shape on my my profits and looking to add a little bit to the day.

Between 10 they're 10 and 11. Alright you guys, so that's it for me. Have a great day and make sure you check out some of the links in the description if you want to learn a little bit more about my strategy. Okay, see you guys later.

Bye everyone.