It is 9:17 am. The market opened five minutes ago. Looking at your screen, you can see that 50 stocks are moving up, another 30 are moving down, while the remaining stocks are inactive. With only 15 minutes at hand, what do you use as criteria for selecting the right stocks? Volume, price movement? Your choice in the span of two seconds decides whether you make money today or not.<\/p>\n\n\n\n
In intraday equity trading<\/a>, the speed of the screen can be as important as its accuracy. The price scan<\/a> helps identify stocks that are making large movements. The volume scan identifies the stocks that have seen unusual activity. Both types of scans are equally valuable, but they help answer different questions. Understanding which one is more important than the other helps the trader immensely.<\/p>\n\n\n\n This article discusses both approaches in depth and tries to highlight which approach wins where and which ones fail.<\/p>\n\n\n\n A price scan for intraday purposes filters stocks based on immediate price behaviour. Typical intraday price scan filters include:<\/p>\n\n\n\n Price analysis is inherently reactive. It allows you to see what is going on. It will be beneficial for those who break out of a trend to catch up with the momentum. However, it might be that when a price has gained 3% by 9:30 AM, then that will be it for the day.<\/p>\n\n\n\n A volume scan filters stocks experiencing abnormal trading activity relative to their average. Common volume scan conditions:<\/p>\n\n\n\n Volume is commonly referred to as the fuel for price action, and this description is quite accurate. A stock that gains 2% in price but does so on low volume may reverse course very soon after the event. A 2% rise in price on three times normal volume has a much better chance of seeing follow-through action [1].<\/p>\n\n\n\n For trending markets, price scanning is a trader\u2019s best friend. If NIFTY starts positive and market breadth confirms the trend, price scanning becomes the most important step to capture the power of breakout moves.<\/p>\n\n\n\n The initial 90 minutes of the day have the highest volatility and volume participation. For this period, price scanning helps a trader in following the gap-and-go strategy, which is considered among the most popular intraday strategies. If an individual stock goes up 3% on any sector-based news in a trending NIFTY scenario, the stock qualifies for a trade in a price scan output.<\/p>\n\n\n\n On such days of flat or choppy markets, price scans are noisy. Stocks move 1% higher one minute and 1% lower the next, without follow-through. It\u2019s these sorts of days where volume scans prove valuable.<\/p>\n\n\n\n A sharp increase in volume on a day where there\u2019s no clear price action is similar to when a dog starts barking about something he cannot see. There\u2019s an underlying event taking place, possibly even a block trade, institutional buildup, or a response to information yet to be made public. Volume tends to precede price moves more than many investors understand.<\/p>\n\n\n\n Data from SEBI shows a 20% decrease in unique retail derivative traders on a year-over-year basis, but still 24% above what was seen two years ago [2].<\/p>\n\n\n\n It is a common occurrence for all intraday traders. You get a stock that has increased by 4% from the opening price. You purchase. In less than 30 minutes, you lose the entire profit. What did you do wrong? You failed to analyse the volume. There were below-average levels of volume when the stock had opened higher. It was an unsustainable trade with no institutional participation.<\/p>\n\n\n\n The same can occur on the other side. You have a stock that has registered three times the average level of volume on your scanner, yet the price does not move. You wait for two hours, and nothing happens. There were huge volume transactions that occurred between two institutional clients. The volume alone does not indicate the movement of price.<\/p>\n\n\n\n In intraday equity trading, either form of analysis is insufficient individually. The successful traders utilise both forms.<\/p>\n\n\n\n Here\u2019s a simple, repeatable workflow:<\/p>\n\n\n\n This layered approach takes less than 15 minutes and dramatically improves your hit rate compared to picking stocks based on price or volume alone.<\/p>\n\n\n\n A price scan gives you a picture of what\u2019s going on, while a volume scan confirms that it is really going on. When it comes to intraday equity trading, you have to know both before making any commitment. The problem for those losing money through intraday trading isn\u2019t necessarily choosing the wrong stock; it is the failure to properly screen those stocks before investing money into them.<\/p>\n\n\n\n With SmartDelta<\/a>\u2019s sophisticated stock screening tools, it becomes easy to screen on the basis of price movements, spikes in volume, and technical analysis, ensuring that you base your decisions only on the right data.<\/p>\n\n\n\n The price scan looks for stocks that exhibit a certain price pattern, like stocks that have gaps up or down by more than 2%, break out above their high prices, or gap down below their low prices.<\/p>\n\n\n\n Volume scanning will help identify abnormal trading behaviour, such as a current trading volume of two to three times the 20-day average volume, indicating that an institution may be accumulating shares.<\/p>\n\n\n\n Price scanning is more suited to trending environments. When NIFTY has a clear trend and breadth supports the trend, price scanning emerges as the most powerful technique for taking advantage of gap-and-go and breakout plays within the first 90 minutes.<\/p>\n\n\n\n A single scan would generate false alarms. A movement in price without volume could easily be reversed, but the presence of volume without price movement might denote trades conducted by institutions that have nothing to do with retail trade.<\/p>\n\n\n\n Begin with a price scan on stocks that have made gaps of 2% or more, followed by a confirmation using the volume scan, checking for double the volume than usual, and finally ensure that the price is above the VWAP.<\/p>\n\n\n\n [1] <\/strong>High-liquidity stocks with consistent volume attract retail and institutional traders, creating cleaner intraday patterns. (Source: Enrich Money<\/a>)<\/p>\n\n\n\nWhat a Price Scan Catches in Intraday<\/h2>\n\n\n\n
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What a Volume Scan Reveals<\/h2>\n\n\n\n
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Price Scan Wins When: The Trend Is Clear<\/h2>\n\n\n\n
Volume Scan Wins When: The Market Is Uncertain<\/h2>\n\n\n\n
The Hidden Risk of Relying on Just One<\/h2>\n\n\n\n
A Combined Intraday Screening Workflow<\/h2>\n\n\n\n
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Bottom Line<\/h2>\n\n\n\n
FAQs<\/h2>\n\n\n\n
What is a price scan in intraday trading?<\/h3>\n\n\n\n
What does a volume scan reveal that a price scan cannot?<\/h3>\n\n\n\n
When should an intraday trader prioritise the price scan?<\/h3>\n\n\n\n
What is the risk of using only one type of scan for intraday trading?<\/h3>\n\n\n\n
How can traders combine price and volume scans effectively?<\/h3>\n\n\n\n
Sources<\/h2>\n\n\n\n