How to Make Your Own Day Trading Scanner
In this article, I am going to discuss how to make your own day trading scanner step by step. Please read our previous article where we discussed 3 Techniques for Risk Management in Trading. Here, you will learn how to get the stock market data, such as price, volume, and open interest data, using a Google Spreadsheet and how to analyze it. After reading this, you will be able to:
- Analyze the End of Data
- How do you create your own Google spreadsheet for data analysis?
- How do you use this sheet?
What is the end of data in stock?
This means what the price did on that day. It shows open, close, high, low, open interest, option chain data, etc.
Where to get this data?
After the market closed. NSEINDIA published this report in bhavcopy file
What to download?
Download the capital market bhavcopy file and the Derivatives market bhavcopy file. The link is given below
How do you make your own Google spreadsheet scanner?
All the steps are described in the below video.
Use of scanner
- Can we predict the stock trend by analyzing the end of the data?
- Can we find stock for the next day?
What is contained in this sheet?
Buy/sell column
So, for long stock, it should have high volume, high OI, and PCR>1. So, we make our buy column by giving the above condition
Change in Volume and Change in the open interest column
If ultra-high volume, we find. Then something unusual happened. By checking the chart, we can determine whether the stock for tradable or not. Whether it breaks out from any support or resistance level with high volume. then we must keep it on our watch list
Change in price
Here, we will find the top gainer or top loser stock. Check the chart to see why the top gainer is a top loser.
Change in PCR column
Gap up and gap down the column
This column updates aftermarket open. Have a look at this sheet
How do I use this scanner?
Let me tell you some basic information.
For trading purposes, stocks with lower volumes and lower open interest should be avoided.
Why?
The analogy of volume and open interest in the market is like that of fuel to a fire. If the fuels are removed from a fire, the fire will go out. If fuel (volume and open interest) is removed from a price trend, the trend will change or move will stop. When open interest and volume decline, fuel is removed, and the prevailing price trend is running on borrowed time. For a healthy, strong price trend (either up or down) to continue, open interest and volume ideally should increase, or at least not decline.
Option chain analysis
PCR=put to call ratio
Buy Rule: 1. Change in PCR(OI) is positive.
Sell Rule: 1. Change PCR(OI) is negative.
In the video, I explain live how to select stock for the next day based on day data analysis. Here is the list of stock that shows buy condition
Even our scanner shows buy condition. After the market opens, if our trading setup doesn’t tell, then I am happy to avoid trading.
Tips: If the index and sector are bullish, trade with strong stock on the bullish side.
