With thousands of stocks listed in the exchange for trading, how does a trader go about his stock selection? I am really not refering to the elemental approach where the trader studies the basics of the company, and research the performance results of the company, check its price-earnings proportions or check its balance sheets and turnover and its dividend yield.

Generally among those successful traders who actually make their living off by trading professionally in the exchanges, their preferred strategy looks to be the technical research approach.

By this, they use charting, and technical signals applied to the stocks. They’ll create filters or explorations, to scan for stocks that meet some selected signals to show the stocks are starting to move or have started to move.

Pro traders who trade as a living have a range of trading tools to help them, but one of the commonest tools they use to good effect is the indicator called On Balance Volume.

Popularised by Joseph Granville, the On Balance Volume or OBV briefly is essentially accumulative volume, where the base principle is that similar OBV should support equivalent cost. By employing this indicator, short term traders will be in a position to identify when there’s a difference in this setting, or where OBV has outbreak already but price has still lagged behind, giving rise to the situation where an upcoming price jump is anticipated.

But how massive is the imminent jump? If there’s indeed an OBV outbreak, and by inference the price should follow in the following few trading sessions, one must also ensure the approaching jump is of enough size to deserve a good margin of profit tasty enough for him to trade.

Added to this trade indicator, traders add one more trading condition to nail those giant moves. We know in Elliot wave speculation the three and five waves of any stock are the reckless and powerful waves up.

I’ve seen much success from traders who scan their stocks with an OBV outbreak and are in their impetuous three and fifth waves which are their longest and strongest waves.

Armed with this understanding, when a stock is found to have just undergone an OBV Outbreak upwards and is moving within either its 3rd or 5th wave, you have an excellent candidate that will probably run away in price, and letting you reap a handsome profit within a short trading period.

Want to find out more about commodity spread trading, then visit Author Name”s site and get related info about day trading tools for your needs.