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Checklist When Picking Stocks When Day Trading

Tuesday, October 27, 2020

Day traders have the freedom to choose from the wide array of equities available for them. The option is not the problem, figuring out which of these equities to trade is the real deal. After you figure out which FX Trading opportunity is best suited for you, then you now need to find the best way to gain profit on them.

Choosing Stocks For Intraday Trading

Day traders need to select stocks with ample volatility, liquidity, and group followers.

Liquid Stocks

Liquidity in stocks allows larger qualities to be purchased then get it sold without really creating a huge impact on the price. The strategies used in intraday trading is dependent on the timing and volume, which makes it easier to get in and out of every trade.

Medium Volatility to High Volatility

Price movement is needed to make money in day trading. traders can opt on stocks that tend to move a lot, be it in dollar terms or terms of percentage. Take note that stocks that move 3% and more in a single day can acquire consistency in large moves for day trading.

Group Followers

Most intraday traders tend to find equities that correlate with their index group or sector. In case the trader wants to trade similar stock every single day, it is best if you will focus on one stock so that, you get relieved with worries related to correlation.


Strategies For Entry and Exit

You may have found and picked the best stock in the world, but the profit you gain depends on no one but you. Though there are really different powerful strategies to choose from, the most important thing out there is to stick on some guidelines which are proven to be effective.

Trading with the Current Day Trend

It is your job as a trader to ride along with the waves brought by the market. When an uptrend comes along, you should focus your attention on picking long positions. When a downtrend occurs, you take on short positions. The difficult part of this is the isolation of the trend. But one thing’s for sure, providing more signals helps in seeing better insights right across the changing dynamics of the market.

Be Patient In Waiting For the Outcome

Trendlines are nothing but an estimated visual guide indicating the start and end of every price wave. Because of that, when you pick a stock for your day trading, you can utilize these trendlines for the entry of the next price.

Take Profits Regularly

Since day traders only have a limited time to get their profits, it is just right to spend only a small time moving forward from a losing trade or trades that are moving in the wrong direction.

Don’t Play Around When The Market Stalls

Take note, the market doesn’t always offer a chance to trend. There are times when intraday trends are reversed very often that the direction becomes too tough to establish. In such cases where the price moves in range, you may move on to a range-bound strategy.

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