Identify The Best Stocks For Day Trading
Day trading, when done right, can be so profitable that you can even comfortably rely on it as your main source of income. If you have enough time to spend in trading then you would be able to easily execute multiple trades in a day and thus earn a small portion of profits by the end of the day. Finding the best assets to day trade be it in the stock market or in the cryptocurrency market, takes time and efforts. Here a majority of your work is complete if you identify the best assets. In trading, there is an easy way to earn money and there is the hard way which yields better profits. The easy way is to use trading bots but if you would like larger profits then your trading knowledge alone would help. Whether you plan to use a trading bot or whether you plan to do it yourself have a reliable source of information where you could get all your answers.
Getting back to day trading, here are a few tips to pick the best stocks –
Stay up to date with what is happening in the market
Getting market news from multiple sources would give you several leads and make the process of picking the stock simpler. There might be several social signals that you come across. Study the stocks that the popular traders recommend for intraday trading.
Volatility is its strength
The more volatile the stock is the more the number of chances you would get to buy and sell. So look for stocks that are very volatile within a day. Price changes that spread over a few days cannot be taken as volatility in this case. Whether you choose to compare the changes in terms of the dollars or whether you observe the percentage of change, you need ones that move quickly when you day trade.
Highly volatile stocks without an ample number of buyers and sellers are of no use to day traders. You need a stock that can be bought at the set price and sold easily when the target is met. Therefore liquidity is something that matters the most for day trading stocks.
The trading volume gives you valuable information
Average daily trading volume is an indicator of how many transactions happen on a daily basis. Even the most volatile stocks, those with a high liquidity would have to possess a large trading volume to be recommended as a good option for day trading.