To select the best day trading stocks, you first need to understand what the term ‘day trading’ is.
Who exactly participates in this day trading process?
Is it for you or should you dabble into it?
Ask these questions to yourself, before you jump into day trading.
Day trading is a specific form of trading where traders buy or sell stocks/securities multiple times within a day.
This trading form can be seen in any trading marketplace, but mostly occurs in the stock market of Forex market.
Day traders actually have well-funding and are highly educated in this niche.
Traders make use of high leverages and adopt short term trading practices, thereby capitalizing on the price volatility.
This price changes happens to liquid stocks or other currencies.
Day traders runs the stock market efficiently through arbitrage and bring much more liquidity to the market.
Although private traders can practice this form of trading, however, mostly financial institutions do it.
This is because they can effectively leverage their transactions to increase their profit margins.
Nowadays, you can do day trading from anywhere since, most online brokers bring you the chance.
Although the Wall Street have showed its doubts on the potential profits of this trading, it is highly profitable.
At the same time, it inherits a lot of risk investment strategies.
Finding the best day trading stocks requires in-depth knowledge of the market, sound funding, and most importantly, a concrete plan.
Finding the Best Day Trading Stocks Requires Research
You can trade a large number of stocks at any day.
This potential numbers of trading opportunities can be overwhelmingly attractive to an untrained Joe.
Are you interested in going for stocks such as Apple or Google?
Do you like IPOs or just go for a flip depending on the market hype?
You maybe research the market to find the best day trading stocks that goes well with your methodology of trading.
If you intend to find a ready list of the best day trading stocks and make loads of money, forget it.
You need to do a thorough research to find the best day trading stocks and it takes time.
Even if you have all the qualities of a day trader, it is not going to help.
It is important to select the proper stocks, if you want to find the best day trading stocks.
Most traders fail due to the simple fact that they end up choosing the wrong stocks.
There are specific set of rules to follow and avoid these pitfalls; so better digest them quick enough.
Starting Your Day as Early as Possible to Find the Best Day Trading Stocks
I will be sharing with you a number of strategies to make use of within the day and the pre-market.
This will help you find the best day trading stocks.
Irrespective of the fact, which strategy fits you, one thing you need to do for sure is start your day early.
You need to make an early start to your day trading and the below steps directly depend on it.
Forget those lousy days when you simply logged in post 9 a.m. and start trading.
Markets have become much competitive and faster nowadays.
The trading volume has increased drastically with hedge funds.
Hence, it is always imperative to at least start your preparation as early as 8 a.m.
It will help you in completing your research to find the best day trading stocks.
It will also help in configuring your monitor with the trading stocks you need to keep track over the course of the day.
Best Day Trading Stocks Through Pre-Market Movers
If you are into day trading for long, you will understand how you can get deceived with the pre-market.
You can consider it as the street’s favorite ways of deceiving you.
A specific stock could show up at 6% during pre-market, however, open at a mere 2% when the day starts.
It is because of the thin volume factor that could take a stock either way outside any regular trading course.
This price swing can literally put you into trouble.
Therefore, if you start at 8 since it will get you more than an hour to conduct your thorough research.
Here is what you need to look for when you start at the pre-market spell.
Stocks that are more than 5 Dollars each are the best day trading stocks.
Before all, traders of penny stocks start to yell in the market.
You should have tight stops on your trades, since $1 stocks will leave you with no such room.
You need to go for heavy volume ones; ignore those which states like 20% up on a total of 200 shares.
If you come across stocks going up decently and more than $5, check the average volume for last 30 days.
This is crucial to filter out ones which are trading thinly and not the best day trading stocks.
When it comes to major indices like NASDAQ, S&P or DOW, you should analyze the broader future market value.
Although, breakouts do not depend on the market, but it is always imperative to follow the broad market.
You should have pre-market movers from your own trading platform.
However, if they don’t show up proper analyzation, here are three resources for you.
- NASDAQ Pre Market Values
- Stock Market Analysis to note the pre-market movers
- Stock Market Watch
Go for High Volume to Pick the Best Day Trading Stocks
Day traders who have been playing for long understand the amount of funds required for this.
If you have thousands of dollars for trade, you need to go for heavy volume best day trading stocks.
You need to select stocks in plenty of volume to enter the market fast and leave it with ease.
You should somewhat try to keep 40,000 shares every 5 minutes.
If you own a brokerage firm, then you should have a Most Active list that will show up Top 20 stocks or so.
However, you require a broader scan that shows trading potentials, not tracked by others to find the best day trading stocks.
Try to pick stocks that goes up on higher volume parallel to them.
If a specific stock selling 2 million shares daily, has traded 5 million shares prior to 10, it is notable.
You might think they will appear as the best day trading stocks on your trading platform.
However, it is not always the case since your platform will show up only top 10 or 20.
In case your trading platform is not offering a robust stock screener, try these out.
- Unusual Volume from Yahoo Finance
- Bar Chart which has more than 200 symbols.
- The Street for high volume best day trading stocks.
Create Your Watch-List to Find the Best Day Trading Stocks
You obviously need to create your own list of best day trading stocks from the ones you follow daily.
However, since the exchanges comprise of a large numbers of stocks, it is better to target sectors.
Go for the following sectors:
- Precious Metals
When you have selected the sectors, start following the top stocks movements to find the best day trading stocks.
Take some time and carefully analyze the price movement of these issues for couple months.
According to Richard Wyckoff method, each of the sector has an operator that controls the market shifts.
This investor has the most amount of money in your stocks, so they have a potential interest.
One issue with creating a list is that you need to limit the number of stocks you track for specific 1 or 2 sectors.
Try to track only 10 stocks for every sector so that you have to follow just 20 stocks at once.
In order to choose the best day trading stocks, due diligence is absolutely imperative.
With experience you will learn which ones to avoid so to have an edge over other traders.
Analyze Your past Trading Performance to Pick the Best Day Trading Stocks
This is actually a very important step if you want to find the best day trading stocks.
Instead of looking for advice from other people on the best day trading stocks, analyze your stocks.
How about going back and looking for the stocks you traded earlier?
You will definitely come across at least one such specific stock that you have been trading all along consistently.
Analyzing your past performance not only help finding the best day trading stocks, but help to understand it.
Why do you think you have been attached to that one stock or always going for it?
Call it whatever you may wish; your soul stock or one of the best day trading stocks of your choice.
It funny but true you will feel like you own that one’s movement since you are so comfort with it.
You can understand it in and out easily and make profits every time you trade that stock.
I especially liked trading Micron Technologies (NASDAQ: MU) and knew it in and out.
I never had to fight trading with that particular stock and profited each time I went for it.
Research your previous history and try to find out that one stock which always pops up on your list.
Social Media Importance in Finding the Best Day Trading Stocks
Social media is one new revolutionary technique to scan the stock market.
I haven’t personally tried it but would like to tell how it can help finding the best day trading stocks.
I do not go for it because I don’t want it to disrupt my views on the stocks.
My view always depends on the pricing and volume of a stock, however, let us see how it works.
StockTwits help in streaming the random thoughts and hopes of stock investors for every stock.
You can find a market sentiment option shown on the top of every stock’s wall.
You can go to their homepage to find the best day trading stocks from a list of trending stocks.
These stocks are being constantly discussed among the members.
You can also find these stocks in the news as the best day trading stocks.
However, sometimes you will find members discussing about a stock movement at the middle of the day.
In that case, news publications are unable to show it on the news.
This works somewhat similar to that of StockTwits, but with a little modification.
You can see list charts displayed on the homepage that are popular.
The best thing about this platform is it mentions the time, the last data was pulled up.
This is especially important when even a minute can decide whether you lose or win.
One more cool addition is that it lists the stocks that are popular among users over time.
Track Stock Earnings to Find the Best Day Trading Stocks
The reports of earnings is sure to bring in potential volatility.
You will definitely want to know who has been the superstar of the week.
This way, you can know which stocks performed well for the week through earnings calendar.
It will give you an idea on which stock to go for and what performance it is likely to provide.
You can be ahead of everyone and put that specific mover to your own track list.
On the contrary to heavy research, it will reduce your pre-market work.
You can track it at Yahoo Finance, Morningstar or Earnings Whisper.
Keep Your Focus on 1 or 2 Stocks to Find the Best Day Trading Stocks
This is an easy way to keep the process of finding the best day trading stocks simple.
You are pretty clear about the process you need to follow for choosing the best day trading stocks.
You need to scan, properly watch and adopt quick reaction to several stocks daily.
Hence, focusing on one or two best day trading stocks, you can master it faster.
There are two different process to do it.
First, you can go for the best day trading stocks in terms of popularity.
On the other hand, you can choose it from your past performance.
Let me show you some of the best day trading stocks so you can take note of it.
High in volume and spectacular price action.
The company’s popularity has made the stocks soaring high among the traders.
S&P 500 Spiders:
It is an ETF following the S&P Index, having high volume and you can trade index without futures.
Need not mention as you know its popularity
Tesla Motors (TSLA):
Highly volatile and the movement is as fast as the cars.
It has highly polarized the traders unlike any other stocks.
NASDAQ is the most effective when it comes to finding the best day trading stocks.
Its incredible efficiency of facilitating order flow in the late 90’s have made it the best index.
You can easily understand the technical indicators that are best fit to security when you trade 1 or 2 stocks.
You can learn more on the pattern of trading and less stressful to find the best day trading stocks.
There is a very popular saying, “Plan the trade, trade the plan”.
This means that you need to first plan the trading strategies and then implement the same plan.
You got to be very careful in selecting the best day trading stocks and for that due diligence is essential.
It is all about a journey, so you better not try to figure everything in a day.
It takes time to pioneer the day trading practices and find the best day trading stocks.
Take your time and go through all the practices mentioned to ensure the best day trading stocks.
Go for high volume trades after due diligence so it brings you consistent money.
Although day trading is risky, but is highly lucrative if you do careful research and do it in planned way.
The determining factors are volatility, liquidity, high volume, and varying industrial conditions.
They all play a contributing part in the day trading and you need to take care of it very carefully.
Choosing the best day trading stocks is not a rocket science, but you obviously need to take care of it.