Intraday trading stocks need to be selected carefully. There are hundreds of stocks available in the market for trading.
You can pick any stock there but still the stocks for intraday trading should have certain properties.
Be it an intraday trading or a positional trading, the stocks should meet more or less similar criteria. Choosing wrong stock may lead to unnecessary losses. You can avoid these losses by carefully picking trading stocks.
For intraday trading, you would need fast entry and exit into a trade. That is possible when the liquidity in the stock is high.
Pick a stock where trading volumes or liquidity is high. Index stocks are favorite trading stocks for day traders. They are highly liquid stocks.
Simple Guide to Pick Intraday Trading Stocks
Short list 10-15 stocks for trading. Never pick any random stock and initiate a trade.
Having a small list of intraday trading stocks helps in better research into these stocks. It is not possible to research hundreds of stocks daily.
Read technical charts of these stocks on daily basis. Look for the trading opportunities. These opportunities are found usually a day before the market opens.
Clearly identify your entry and exit points before the market opens. Execute your plan when market opens.
Do not trade if there is no trading opportunity found on technical analysis. Remember ; everyday is not a trading day. There are days when market behavior is dull. Avoid trading on those days.
A senior technical analyst Ashwani Gujral says only novice traders and idiots trade in all stocks. So be a good and professional trader and keep yourself limited to minimum number of trading stocks. Smaller number of stocks is easy to track.
How To Pick Intraday Trading Stocks A Day Before Trading
Stock charts reading should be done ideally a day before the market opens. Candlestick charts give more information about the trend or strength or weakness in stock prices.
Stocks showing gap ups, gap downs, break outs above the trend lines or breakdowns below the trend lines have a strong momentum. They make the best stocks for intraday trading.
Moreover, stocks with short-term candlestick chart patterns like bullish engulfing, bearish engulfing, hammers, shooting stars, doji formation, morning star pattern also make best stocks for intraday trading.
Thus, in stock analysis, a day before day trading, you need to short list these stocks for stock trading.
You can use these intraday trading formuale along with the above chart analysis to make more reliable trading decisions.
Pick the stocks for intraday trading which are highly volatile. Volatility is fluctuation in prices a stock shows in a trading session. High volatility results in better profits.
Avoid intraday trading in two digit price stocks. Stop losses and targets are usually difficult to manage in these stocks. Intraday volatility is also less in these kind of stocks. Less volatile stocks are not ideal intraday trading stocks.
Simple Rules to Best Day Trading Stocks
- Select high liquidity stocks for intraday trading. Your order execution should be fast to enter or exit day trade. High liquidity ensures that.
- Pick a few number of stocks only, 10-15 being more specific. Do not trade in everything. It is easy to track lesser number of stocks.
- Pick high volatility stocks. Volatility ensures that there is enough stock movement to make money.
- Prefer index stocks for intraday trading. Index stocks are trader’s preferred stocks. They exhibit minimum required liquidity and volatility.
- Read candlestick charts for the selected stocks daily. Give more attention to the candlesticks formed in last 3-4 trading sessions.
- Avoid trading in small price stocks. Penny stocks or small price stocks usually do not give enough intraday movements. So they may not be that suitable for intraday trading.