BOOTCAMP DAY 3 : Pre-Market Analysis (2025)

Summary

In this video, the focus is on the crucial pre-market preparation for trading. The speaker outlines a structured approach to finding stocks to trade, emphasizing the importance of identifying the strongest and weakest stocks of the day, marking pre-market highs and lows, and using confluence with market indices to make informed decisions. Key steps include reviewing stock patterns, understanding economic data, and being mindful of earnings reports. The speaker stresses the significance of consistency, discipline, and a well-prepared mindset in successful trading, setting the stage for more advanced techniques in future lessons.

Takeaways

• 😀 Preparation is key: Failing to prepare is preparing to fail. Pre-market analysis is essential for effective trading.
• 😀 Focus on strong and weak stocks: Identify the strongest and weakest stocks by their percentage changes before the market opens.
• 😀 Watch key levels: Mark the pre-market highs and lows for the stocks you're watching to spot potential entry points.
• 😀 Confluence is crucial: Look for stocks that move differently from the overall market (e.g., stronger or weaker) to find good trades.
• 😀 Review your trades weekly: Consistently analyze what worked and what didn’t, journaling your trades to refine your strategy.
• 😀 Know your stocks: Familiarize yourself with a select group of stocks and gradually add more as you become more comfortable.
• 😀 Economic data matters: Be aware of upcoming economic data releases that might impact market conditions and your trades.
• 😀 Avoid trading stocks with upcoming earnings: Don’t trade stocks right before their earnings release to avoid unpredictable price action.
• 😀 Check daily candlestick patterns: Larger time frame setups, like daily candlesticks, provide more confluence for your trades.
• 😀 Stay prepared: Every morning, follow your pre-market checklist—identify strong and weak stocks, mark levels, check confluence, and review economic data.

Q & A

Why is pre-market analysis important for traders?

Pre-market analysis helps traders identify the strongest and weakest stocks, prepare for potential market movements, and set a foundation for their trades. Failing to prepare is essentially preparing to fail in trading.

What is the significance of identifying the strongest and weakest stocks before the market opens?

By identifying the strongest and weakest stocks, traders can focus their attention on stocks that are likely to have significant price movement, which is crucial for making profitable trades. This helps you find opportunities for both bullish and bearish trades.

How do you find stocks to trade in the pre-market session?

You find stocks by tracking the ones with the most significant price changes (both up and down) and analyzing their volume and movement. For example, checking which stocks are up the most or down the most can help you identify potential trading opportunities.

What is the importance of marking pre-market highs and lows?

Marking the pre-market highs and lows helps traders identify key levels of support and resistance, which are essential for planning entry and exit points. These levels can indicate potential breakouts or reversals when the market opens.

What should you do after identifying the strongest and weakest stocks?

After identifying the strongest and weakest stocks, the next step is to mark the pre-market highs and lows for those stocks. Once these levels are established, you can track how the stock behaves when the market opens.

How do you determine which stocks to trade if multiple stocks have similar strength or weakness?

If multiple stocks show similar characteristics, you should look for confluence—where a stock's movement aligns with the broader market index. The stock that shows relative strength or weakness compared to the index is typically the better candidate for a trade.

What role does confluence play in your trading decisions?

Confluence refers to a situation where a stock is moving in the same direction as the market or showing strength/weakness compared to the market index. This is critical because trading stocks that align with market movements increases the probability of a profitable trade.

Why is it important to pay attention to economic data releases during the trading day?

Economic data releases, such as reports on inflation, unemployment, or natural gas storage, can cause significant market volatility. Knowing when these releases are scheduled helps traders avoid entering trades just before major economic data is announced, preventing unexpected market moves.

Why should you avoid trading stocks with upcoming earnings reports during the pre-market?

Stocks with upcoming earnings reports can experience unpredictable price movements due to the uncertainty surrounding earnings results. This makes trading options or stocks in the pre-market risky, as contracts may become distorted or mispriced.

What are some key things to check before entering a trade in the pre-market?

Before entering a trade, make sure to check the strongest and weakest stocks, mark pre-market levels, observe the stock's behavior relative to the broader index (confluence), review economic data, and ensure that no major earnings reports are due for the stock.