The C4 Spiker scan is a scan I run in my ThinkOrSwim side bar along with several other scans. If the scan “triggers” for any stocks trading in the US stock market, the ticker symbol will be automatically added to the “C4 Spiker” watch list. I have that watch list linked to one of the charts displaying in my ThinkOrSwim platform layout. I can then click on a stock in the watch list and it will show the chart for that stock in the chart window that it is linked to.
This scan filters out low float/low volume stocks. This keeps the amount of “triggered” stocks down, and also eliminates stocks that are very hard to get in and out of due to lack of liquidity. What is scan is searching for are stock that are suddenly spiking with volume on a daily chart. This is usually due to news that has just come out. This news can cause day traders and auto-trade algorithms to quickly buy without even having time to read or digest the news. Also, shorts could quickly cover when stop loss points are reached, or when they panic due to the sudden spike. depending on what the news is. This spike could continue much higher, or it could suddenly drop and go the other way, if the news turns out to be an over reaction
This scan is used to trigger stocks and create a watch list of “in-play” stocks. Once a ticker is on the watch list you will need to look at the chart and determine why it’s moving, where the price is it relation to its 52 week highs/lows, and many other factors. This scan trigger is NOT a signal to buy or short the stock… If only it were that easy. This watch list just gives you a sub-set of stocks to focus on, that are in-play for the day that they trigger. BUT, With this trigger you need to act fast. Find out as quickly as you can what is causing the suddenly spike and then make a quick decision whether you want to get in, and if you want to go LONG or SHORT. You need to know why the stock is suddenly spiking. If you believe the reason for the spike is justified and that the buying and covering has the strength to continue, go LONG and get out quickly once you start to see weakness. If the spike seems to be an over reaction, let the stock continue to spike and go SHORT once the start to see weakness. Wait for the second dip. The first dip is not usually the signal that the buying is over. It may just be people who went long early, taking some quick profits, or people getting in short too early. People who missed out on getting in early on the initial spike may go long on the first dip. Its better to to try to catch the absolute top or bottom. Rather wait until you are fairly sure of the direction and get the “meat” of the move.
After the scan triggers, I will look at a number of factors to determine if there is a trade to take where I believe I have an edge. If I don’t believe I have an edge I will not take the trade. Never take a trade out of boredom or just following someone else into a trade. These are the things I look at after the scan triggers to determine if (a) there is a trade there and (b) if its a LONG of a SHORT:
- News/Why the stock is moving? With this C4 spiker scan this is the most important aspect (look at: twitter, financial news website)
- Percentage of float short. This is important. It shows how many people don’t have faith in this company. Also, how many people need to cover (could create a squeeze). (look at: Yahoo finance, Google Finance, Finviz)
- P/E ratio. Is the company under or over valued? (look at: Yahoo finance, Google Finance, Finviz)
- Time of Day. Most volume happen in the first and last hour. A move on higher volume has more strength. A lower volume move may be someone trying to manipulate the price to actually go the other way (get in of out). Also if it’s near the end of day or end of week people may not want to risk being long/short ver night or other the weekend. Day-traders want to close their positions and be flat at the end of the day. (look at:hours left in trading day/ days left in week)
- Earnings. If the move is due to earnings. Is the move justified. If it an over/under reaction. Is the price being manipulated by longs/shorts. (look at: earning report, twitter, financial news website)
Or just copy and paste this link into your ThinkOrSwim application:
Go to setup>open shared item>paste link into box. Detailed instructions