I have designed a spreadsheet to spot a list of opportunities. From that I manually create a watchlist off of my own manual filter scanning for visual setups.
The watchlist contains setups that I may consider trading if I have some sort of entry point. To find these I'm looking for a "trigger".
Trading triggers can help you narrow down your watchlist into actionable entry points. I like using a 5 period RSI because it tests well. You can use the same 5 period RSI on an intraday chart like a 5 minute or 1 minute if you really want to narrow down the buy trigger within the buy trigger and be extra precise. Backtests of buying a cross below 20 and selling a cross above 50 provides a compound annual growth rate of over 24% if you ignore transaction fees.
Another triggers include an inside day or cluster of a few days trading in a narrow range or multiple days where the open and close are inside one of the prior day or days. Yet another trigger is a bullish hammer candlestick pattern or a break above a prior candlestick high. Or perhaps just buying at support of the pattern or looking for an intraday pattern within the pattern. I like to have numerous triggers because I'm looking to add multiple stocks and stock options and I use small 0.50-1% positions (and occasionally 2 or even 3% in certain exceptions) out of the money options to gain control over many price movements.
Some of these triggers have been backtested to beat the market. A hammer candlestick pattern with fixed time exit like 5 day hold or 10 day hold provides about a 15% compound annual growth rate(CAGR). The 5 day RSI has 24%. Others have not been tested, but I believe from experience it provides an edge. The inside day seems to work well.
Learn to fine tune classic chart pattern anticipatory entries or even breakout entries by looking for the right triggers. You can try backtesting methods but I have several potential concerns with this that I'll cover later..
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