How To Select Stocks For Day Trading


The crux of any trading lies in choosing the right stocks and all success lies around the selection of the right ingredients for a portfolio. Of course, it is just as important to get the timing of the purchase and the sale right but it all begins with the decision on what stock to buy or sell. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. They believe these five stocks are the five best companies for investors to buy now…


  • Asktraders is a free website that is supported by our advertising partners.
  • More sophisticated and experienced day traders may employ the use of options strategies to hedge their positions as well.
  • Once you’re adept at spotting patterns and recognizing different signals, pull up charts for stocks trading at high volumes and start to assess them.
  • As the saying goes, “Plan the trade and trade the plan.” Success is impossible without discipline.
  • This is allowing private individuals to get in on the game, too.

The same method can be applied to downtrends; profits are taken at or slightly below the prior price low in the trend. Day traders frequently use the trade volume index to determine whether or not to buy into a stock. This index measures the amount of money flowing in and out of an asset. Liquid stocks are more easily day-traded and tend to be more discounted than other stocks, making them cheaper. In addition, equity offered by corporations with higher market capitalizations is often more liquid than corporations with lower market caps. That’s because it’s easier to find buyers and sellers for the stock in question.

Types of Investors

Intraday Trading is about buying and selling a security on the same day in an attempt to book profits. It is a kind of a market order where you don’t plan to take delivery or fulfil it. Use a screener to filter stocks based on specific criteria, such as sector and industry. Screeners offer users additional features such as the ability to sort companies based on market cap, dividend yield, and other useful investment metrics. The first step to picking investments is determining the purpose of your portfolio. The first rule of day trading is never to hold onto a position when the market closes for the day.


Then, isolate those stocks that are relatively weak or strong compared to the index. This creates an opportunity for the day trader, because a strong stock may move up 2% when the index moves up 1%. There is more opportunity in the stock that moves more.

Conclusion: Start Making Money by Day Trading Stocks Today

Unless you see a opportunity and have done your research, steer clear of these. As a beginner, focus on a maximum of one to two stocks during a session. Tracking and finding opportunities is easier with just a few stocks. Recently, it has become increasingly common to trade fractional shares. That lets you specify smaller dollar amounts that you wish to invest. Please note that every investor has their own profile and investment objectives.

A trader needs to have an edge over the rest of the market. Day traders use any of a number of strategies, including swing trading, arbitrage, and trading news. They refine these strategies until they produce consistent profits and limit their losses.

A market order is executed at the best price available at the time, with no price guarantee. It’s useful when you just want in or out of the market and don’t care about getting filled at a specific price. Many stocks trading under $5 a share become delisted from major stock exchanges and are only tradable over-the-counter .


The trader might close the short position when the stock falls or when buying interest picks up. Volatility means the security’s price changes frequently. This kind of movement is necessary for a day trader to make any profit. Someone has to be willing to pay a different price after you take a position.

He has covered investing and financial news since earning his economics degree from the University of Maryland in 2016. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. ConsStock research and investment education lags full-service brokers. ProsExcellent for self-directed trading and financial planning. ConsActive trader platform not as robust as top competitors.

Set Aside Funds

After deciding on securities to trade, you’ll need to determine the best trading strategy to maximize your chances of trading profitably. You may wish to specialize in a specific strategy or mix and match from among some of the following typical strategies. It’s paramount to set aside a certain amount of money for day trading.

These are the indicators that could signify a good potential day trade. Remember, you also want to look for stocks to trade that fit your trading plan. Another excellent way to successful intraday trading is to purchase stocks that are sensitive to news. Any positive or negative news in the media can trigger significant price movements and you can plan your positions accordingly. Day trading is a highly risky activity, with the vast majority of day traders losing money—but it is potentially lucrative for those who achieve success.


These are the most actively traded currencies and will usually provide the lowest spread making them the best currency pairs to start off with. Forex trading home involves speculating on the price direction of different currency pairs within the foreign exchange market. There are a wide range of currency pairs to choose from that are categorised into major, minor and exotics. Margin trading is not recommended for beginners, despite the fact that it can aid in the trading process. The reason for this is that there is a chance that you will mishandle the situation, resulting in massive losses. The stocks I’m watching in November aren’t outliers … The market has been in recovery mode since mid-October….

There are plenty of horror stories of traders quickly blowing up their accounts. Those traders usually end up losing big, and some never recover. With a cash account, you pay for the stocks you buy using the money available in your account. Some of the most well-known stocks or companies are known as blue chip stocks. These are businesses that have been around for years and are an integral part of the economy and everyday life such as Apple or McDonalds.

This must be deposited into the client’s account prior to any day-trading activities and maintained at all times. These traders are typically looking for easy profits from arbitrage opportunities and news events. Their resources allow them to capitalize on these less risky day trades before individual traders can react.

Search the blogosphere, stock analysis articles, and financial news releases for news and commentary on companies in the investment space you’ve targeted. Remember, be critical of everything you read and analyze both sides of the argument. That pretty much covers the basics, whether or not you’ve waded through the more complicated concepts of technical analysis. Today’s high refers to a security’s intraday high trading price or the highest price at which a stock traded during the course of the day. Swing trading is an attempt to capture gains in an asset over a few days to several weeks.

Fees beyond commissions include inactivity fees and IRA fees for having a retirement account. While most brokers do not charge predatory fees, it’s still important to do your due diligence. Just like a bank account, stock brokers also make a portion of their revenue off miscellaneous fees. ConsLike Robinhood, Webull struggles to compete with the best trading platforms in overall depth .

Finding the right stock picks for day trading will have some different criteria that a trader needs to follow to ensure you’re going to be successful. Lets take a look at some must have’s before you pick the wrong stock to day trade. If you follow the day trading tips and ideas in this post, they can help you on your way to becoming a smarter day trader. It can be fun and even simple with enough preparation. Don’t worry too much about the size of your trading account when you’re getting started.

Whatever decision you make, be sure to think it through. You need to that stocks have different levels of volatility and velocity of price movement. By using tools such as Beta, Level I and Level II information, you should be able to see which is the hare and which is the tortoise. A day trader may wish to hold a trading position overnight either to reduce losses on a poor trade or to increase profits on a winning trade. Generally, this is not a good idea if the trader simply wants to avoid booking a loss on a bad trade. Most day traders will end up losing money, at least according to the data.

Written by 

Tinggalkan Balasan

Alamat email Anda tidak akan dipublikasikan.