In my watchlist I usually post several red to green setups. Truth is the red to green isn't a setup but a trigger of when to buy the stock. Red to green triggers come after a big run up on above average volume. The run ups will usually be over 15-20%. The next day we look for morning weakness (starts red), this is a sign of profit taking. After the stock stabilizes it will begin to build momentum. Once it goes green (one penny over yesterday's close) we buy.

We do not take this trade if the stock starts green. We do not take this trade if the stock goes from red to green, back to red, back to green.

This is an easy play to scan for, setup, alert, and trade. You don't have to look for some special setup just play it one penny over the close.

This is a day trade only trigger and should be used for quick scalps.

great stuff Adam - this is a new concept for me - makes sense though because I can think of countless occasions in the past where stocks go on this huge multi-day run and then open much lower the following day, only to return to green for a strong day higher yet again.

Good stuff man. Thanks!

very true Ryan. The nice part about this setup is it allows you to trade those big runners that you missed. Plus, it is sooo easy to scan for.

Quick and easy is right up my alley - save the head scrathers for those who have more time on their hand and want to make trading more difficult than it already is.

What scanning parameters are you using?

Just look for the biggest gainers that day. You can do this through Finviz.com or your own screening tool. Once you find a big gaining stock then make sure it has the volume to go with it. I will post a red to green watchlist here tomorrow morning.

Some red to green stocks on the radar today:

HEK
BAMM
KITD

Not too many today and with the gap up we might not get any but keep them on watch anyways.

More examples from today:

LNKD
ZOLT

AdamBeaty wrote:


Thank you very much for this trading strategy. I've been trying it a few times now, and have had mixed success. But it's not because the strategy doesn't work, more because I keep shooting myself in the foot.

What kind of order setup do you recommend for this. Should we use a conditional order that, once breached, you put in a stop order, or maybe a stop-limit? I'm curious as to how and what kind of orders you use so that you don't get a weird fill because someone flashed an erroneous order that triggers my stop.

Sorry for being so long winded but I appreciate your thoughts on this.

The best way to do it, if you have the time to sit in front of the computer is to limit in. That is, just to use a limit order when you see it move green. You can use a buy-stop but you have to be careful about those weird fills.

Here are some red to green example from today:

Failed Example DHT
Good Example ONTY
Good Example OWW

AdamBeaty wrote:


Thanks Adam for the reply - I know I've had some weird fills too trading this strategy. I would assume, because I'm fairly new to this strategy as well, that you get more comfortable with it as time goes along.

You can get some pretty wide fills which can make the limit order a little harder if it skips over your entry price. But limits will control the risk much better that is for sure, and allows for you to see with the naked eye whether the red-to-green crossover legitimately takes place.

Thanks again for all the examples as well.

Ryan makes a good point about this new strategy. Since it is new to a lot of people, use a smaller risk than normal until you get a feel for the strategy. You can even raise your buy in price to a couple of pennies above the red to green point. Just make sure the risk/reward profile is still ideal.

Keep your risk small. You can take a couple of losses on this strategy from bad fills or not working out, and make it all back on one good play.

The other day I hit 2 out of 3 red to greens. That one loss didn't effect me at all since I quickly made it back on the next play.

oh...and I will continue to update my pages with examples of the trades

Here is the FLOW red to green video.