How To Choose Stocks For Day Trading


A trading platform is software with which investors and traders can open, close, and manage market positions through a financial intermediary. To become a day trader you’ll first need to decide on a broker that fits your needs. To help you get started, Investopedia has made a list of the best stock brokers for day trading. The volume of the stock traded is a measure of how many times it is bought and sold in a given time period—commonly within a single trading day.

daily trading volume

Because day traders are normally buying stocks, a breakout normally means the price moving above a significant price level. The significance is that the price has not moved into this new territory for some time and it shows that buyers have become more enthusiastic than sellers. One of the main criteria while intraday trading is the volume of the stocks. The volume indicates total number of shares that are traded in a market at a given time period. It is mostly recommended to purchase stocks for intraday trading that are high in volume.

Intraday trading is sometimes dangerous even for the most experienced day traders, as they can face difficulties and suffer losses. Constant nervous tension and work at a high pace require high self-organization, self-control and endurance. Traders who trade in this capacity are generally classified as speculators. Day trading contrasts with the long-term trades underlying buy-and-hold and value investing strategies.

The line is drawn connecting these two points and then extended out to the right. On the chart below, the price bounces off the trendline a couple of times before the price falls through it the third time. When entering a long position, buy after the price moves down toward the trendline and then moves back higher. To draw an upward trendline, a price low and then a higher price low is needed. Whether you’re just starting your investing journey or building on the success you’ve already achieved, there’s no better time than now to take the next step. Sharekhan gives you absolute control over your investments by putting you directly in touch with the world’s best financial advisers online.


During the coronavirus pandemic, airline stocks such as American Airlines presented a ton of day trading opportunities. On March 16, a premarket catalyst was announced – the airline industry was seeking a $50B bailout. If a certain stock is trending up in pre-market, you have a chance to jump in before the market opens to the public.

Our trading guide​ covers more on day trading stocks and other markets. Low Float – Well, actually you can get volatility without the volume. When a stock has a low float, that means few shares are available and liquidity is low. Low float stocks are prone to large moves since it takes relatively few buyers to seize control of the trend.

Day trading is not for the faint of heart, since you can lose money just as quickly as you make it. But by doing some research and watching your picks carefully, you may find success — and have a little fun at the same time. Because the stock must be purchased and sold in a single day, liquid stock investing is critical. High liquidity ensures that the stock may be purchased or sold anytime required – this aids in capturing any possible gains that may emerge from massive price activities in a single day. Intraday trading tips and approaches are fundamentally distinct from long-term investment.

Amazon Stock Price Prediction

Given the focus on price and volume moves, traders have traditionally used technical analysis for shorter-term trades. Another measure of volatility that is especially popular with forex day traders is called the Average Daily Range or a variation called the Average True Range . It is the average points difference between the high and low of a stock over a certain period of time, normally 14 days. Some intraday traders involve in trading only in specific stocks. This is because these traders involve in detailed study of stock movement.

If you prefer trading ranges, you may want to only trade stocks that have a tendency to trade within a range. If you choose a trending strategy, you may want to only trade stocks that have a trending tendency. Range trading refers to the difference between a stock’s low and high prices in a specific trading period. For example, you may partake in range trading if you decide you’ll buy a stock at $25 per share and sell when it reaches $30 or higher. You would do this over and over again as long you believe that the stock price would stay in this range. There are a lot of stocks and funds available for investors to day trade.


What might make it less intimidating is if you were able to get some… It’s no secret that tech have faced a decline over the past couple of years. While some investors see this as a deterrent, others see it as an opportunity to capitalize on.

How to Day Trade Stock Picks

There is always a stock exchange open somewhere, and there are always stocks offering day trading opportunities. Unless you have an eidetic memory and superhuman speed, there’s no way you can keep track of them all. That’s why day traders rely on scanners like the ones offered by Trade Ideas. There’s no set amount of money you need to day trade stocks, as most brokers don’t have any minimum deposit size.

The best stocks for day trading are those that experience high average daily trading volume, liquidity and volatility within the stock market. On the face of it, investors can trade just about any stock daily. However, not all stocks on Wall Street can deliver enough temporary daily supply or demand inefficiencies for day traders to capitalize on and earn profits. At the same time, you need to do a full battery of research every time you plan to day trade.

Screening for Day Trading Stocks

While indices may experience less volatility than some individual stocks, they still present opportunities that day traders can develop strategies around. Technical analysis set-ups may provide day traders with insights into what to buy and sell, and when. For example, as a stock price approaches a support level, this may present a buying opportunity if it bounces off it or a short trade if it keeps falling through support.

We can see that A was unable to trade above the previous day’s high, either on an intraday or closing basis. Also, it traded in a narrow range and closed about where it opened, all signs that buyers lacked conviction. We have highlighted the most important filters to use on the stock screener– breakouts, gaps, volume, beta, ADR. But other filters can be used to filter what type of stock you are trading.

There are several charts available to show how the share has performed, including bars, graphs, candlesticks, and 5- and 15-minute charts. Match ideas with potential investments using our Stock Screener. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Behavioral Finance and Investing Psychology has a huge impact on how investors behave.

  • With a current market valuation of more than $950 billion, the company is one of the largest in the world.
  • Day trading is not for every investor, so make sure you’re prepared.
  • Carvana has a beta of 2.71, making it significantly more volatile than the overall market.
  • They are the ideal investment vehicle for investors who want to make a living on the stock market as day traders.
  • When you consider all relevant facts, making a choice becomes simple.

The best way to do that is to study the market, read up on company financials, consider what sectors best reflect your personal needs, personality, and values, and remember to start early. You’ll need to get a head start on the trading day, so it’s a good idea to time yourself according to market openings. It can be hard for many traders to alternate between trend trading and range trading. If trend trading, step aside when markets are ranging and focus on trading stocks or ETFs that tend to trend. When range trading, avoid trading during trends and focus on trading stocks or ETFs that tend to range. The market always moves in waves, and it is the trader’s job to ride those waves.

Stock Screeners

You will have to start your business day ahead, therefore it is a good idea to take a break depending on the opening of the market. However, because many brokers now offer internet trading, intraday trading may be carried out by regular people, with just a few instruments and resources, practically from anywhere. However, day trading is really a risky investing technique – one which needs a lot of research, information, experience and patience. Very active day trading stocks often have a lot of social media buzz around them. So-called meme stocks​, such as GameStop and AMC Entertainment, are examples of this.

Price and market capitalization.This can be a good place to start as it allows you to eliminate a lot of stocks right away. For example, if you’re not interested in stocks priced over $100, you could exclude them in the screen. Fundamental and technical analysis are two common ways to sort and pick stocks. How and when to use them can be a matter of personal style, but each has its strengths.