How To Select Stocks For Day Trading


High volume is the first sign of a good potential trade. Screening is the best way to shake out trades from 16,000 actively traded stocks. But first, you’ve gotta understand why these criteria are important. NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site.

trading volume

A seasoned player may be able to recognize patterns at the open and time orders to make profits. For beginners, though, it may be better to read the market without making any moves for the first 15 to 20 minutes. Based on the economic, political, social, and other factors, markets tend to move either upward or downward. Stocks have a positive or negative correlation with the markets.

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.

stocks for intraday

Short sellers should isolate stocks or ETFs that are relatively weak. In this way, when prices fall, you are likely to be in stocks or ETFs that will fall the most, thus increasing the profit potential of the trade. Trendlines provide a simple and useful entry and stop-loss strategy. The following chart of the SPDR S&P 500 shows several short-term trends during a typical day. While there are those who specialize incontrarian plays, most traders look for equities that move in correlation with their sector and index group. This means that, when the index or the sector tick upward, the individual stock’s price also increases.

The Importance Of Choosing The Right Stocks

Occidental Petroleum currently has a high beta of 1.98 which means it is nearly twice as volatile as the overall market as determined by the benchmark S&P 500 index. A stock with a beta higher than 1.0 is considered to be more volatile than the benchmark. A stock with a beta lower than 1.0 is considered to be less volatile than the overall market. As most of the dots are blue, this means that most of these indicators across eight timeframes are showing bullish signs. This is a great way to keep up to date with the indicators on the higher timeframes. Keeping track of what is happening on multiple timeframes can be challenging.


These were some of the tactics you can use to choose the appropriate for intraday trading. However, before trading, please remember that intraday trading can be very risky due to the high levels of volatility involved. So, it is crucial that you assess your investment objectives and risk appetite before taking any decision. There are several stocks that have a strong correlation with a specific benchmark or sector of the stock market. Investing in such securities can be highly beneficial for intraday trading. Profits are also realised quickly, which is an advantage.

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It takes time to learn how to successfully day trade stocks — there are many ups and downs along the way. Before you risk real money, set up a paper trading account. Sometimes a day trade will carry into the next trading day — but this isn’t usually the case. Leveraged products are speculative in nature and may result in losses or profit.

You can scan using almost any criteria — whatever indicates a great trade for you. You have blueprints, a plan for the whole project, a timeline, and a strategy for how it’ll all come together in the end. Things may change, but generally, you stick to the plan.

In the end, the trader is the one who determines the risk. It is entirely up to him how much money he wishes to invest in the market. Last but not least, Tesla Inc. is another popular choice for day traders because of the organisation’s major proponent of environmental conservation. We usually call a stock with less than 10 million float a low float stock. When there’s a lot of volume coming into a stock, this limited supply will force the price to go up. Short-selling a stock that has gone up too quickly when buying interest starts to wane.

MACD. The moving average convergence divergence indicator can help identify buying and selling momentum as well as price divergences. When the histogram is above the zero line it is considered bullish, when it is below the zero line it is considered bearish. This content is intended to provide educational information only.

  • Also, have an exit plan so that if things begin to go downhill, you can exit the market quickly before your losses become too severe.
  • Remember, you also want to look for stocks to trade that fit your trading plan.
  • Day trading can be quite a difficult part of the overall trading function with the brief window for holding a position and the speed at which trading has to be done.
  • Just as with your entry point, define exactly how you will exit your trades before you enter them.

All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly. Some traders might be willing to hold overnight, while others won’t and prefer to maintain a neutral position in case bad news hits before they can react.

What Are the Margin Requirements for Day Traders?

Day traders typically keep a close eye on market movements. They will act quickly if something is profitable or potentially profitable according to the system they install. This is because they will be able to concentrate on a higher winning percentage in their trades. If you want to learn how to day trade, you need to appreciate what makes stocks move. Premarket sessions on Instagram, you can benefit from the searches I do every day.

Performing due diligence means thoroughly checking the financials of a potential financial decision. Note that stock picking as a strategy often underperforms passive indexing, especially over longer time horizons. Pick an industry that interests you, and explore the news and trends that drive it from day to day. If you’re going to trade on margin you’ll also need a lot of cash on deposit with the broker. This is not recommended for a beginner as it carries a high risk that the trader will wind up broke and deep in debt.


ESG and hence ESG stocks have become a popular acronym in the investing world lately. If you are wondering what are the best ESG stocks to watch for, then you already know what ESG is. If not, then let us give you a quick intro following more information on ESG stocks. However you decide to exit your trades, the exit criteria must be specific enough to be testable and repeatable. Together, they can give you a sense of orders executed in real time. Then movement begins to pick up again toward the closing bell.

Whether it is the access to working, experience in the business, knowledge levels or the material he is working with, this varies across traders. Matthew is a freelance writer and equity analyst who started out by writing coverage on the cryptocurrency market and on emerging technologies. His work on artificial intelligence has been published by the NewScientist magazine and he is a former contributor to FXStreet. Before becoming an analyst, Matthew was a team member of several prominent startups in the crypto and fintech space. Matthew now specializes in covering companies in the technology sector and seeks to uncover stocks and entries with an asymmetric risk to reward ratio.

Learning how to manage your investments is essential and can help you achieve your financial goals. Yes, according to the Income Tax Department, profits from intraday trading fall under business income. So, they are taxable as per your applicable income tax slab. Thus, if you are interested in intraday trading, you need to know the tips to select the appropriate stocks. The minimum deposit needed to day trade in Malaysia differs between brokers, sometimes as low as RM100.

Rule 3: Identify and Trade Trends

An ascending triangle is a chart pattern used in technical analysis created by a horizontal and rising trendline. The pattern is considered a continuation pattern, with the breakout from the pattern typically occurring in the direction of the overall trend. If the price is moving in a range , switch to a range-bound trading strategy. During a range, our drawn lines will be horizontal, not angled. For example, if risking $0.10 per share, the stock or ETF should be moving enough to give you at least a $0.15 to $0.20 profit using the guidelines above.

Next, understand that Uncle Sam will want a cut of your profits, no matter how slim. Remember that you’ll have to pay taxes on any short-term gains—investments that you hold for one year or less—at the marginal rate. Keep yourself informed about the selected companies, their stocks, and general markets.

NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance. Look for stocks that are generally trending up or down, in spite of their volatility. Stocks that trade sideways have the potential to break one direction or the other, which could trap traders in a difficult position if they aren’t quick enough to exit. It’s often smart to identify up- or down-trending stocks and gauge them against a relative strength indicator, to better-understand the bullish or bearish sentiment.