How JTrader's Joseph Gasperoni Finds Stocks To Trade Every Day

Benzinga’s Boot Camp features live trading and educational sessions from 11 professional traders. The following is a recap from Joseph Gasperoni’s presentation. 

It’s very important for traders to have a routine. The first thing Jtrader's Joseph Gasperoni does when he sits down at his trading station in the morning is read the news to get a feel for what occurred overnight. Once he’s done that, he starts to look at his two scanners: one for small-cap stocks and one for large caps. 

How Gasperoni Picks Stocks

For the small-cap scanner, Gasperoni narrows his focus to stocks that are under $300 million in market cap, are priced between $1-15 per share and have a low float. 

Of that group, he looks for two things: volatility and liquidity: stocks that have gapped up at least 7% and have traded at least 100,000 shares in the premarket. 

For his large-cap scanner, Gasperoni likes stocks that are above $20 per share, have premarket volume of at least 200,000 shares and have gapped up at least 3%. 

Volume is critically important, especially for small caps, he said. Without heavy premarket volume, stocks can often fade after the open. 

“The more volume the better,” he said. “You cannot trade every gap, even if it’s a 50% gap, if there’s no liquidity. You can have something that you think is incredible news, but if nobody is on it, you can’t trade it.”

Gasperoni On News Catalysts 

From there, Gasperoni narrows his list of stocks down to four to five small caps and large caps, and he investigates the news catalyst on each one. Once he finds that, he does quick research to see how the stock has previously reacted to similar headlines. 

“I suggest tracking the last three, four or five months and see which news led to a run and which news led to a fade.”

Once he’s got his watchlist set and a feel for how the stocks may react at the open based on the news catalyst, he identifies a level of entry by looking at the recent technical performance of the stock and identifying any patterns. 

To learn more about the Benzinga Boot Camp and future events, click here.