If you have tried day trading you are probably aware of the fact that identifying high volume stocks is not an ice in the cake. There are thousands of stocks available for traders every single day. You can easily be overwhelmed by trading opportunities particularly with the untrained eye. Finding the best stocks that can lead to successful trading need extra work and a little research. Here are the three ways to find the best stocks for successful trading.
Using The Same Stock
It is advisable to trade the same stock every time you trade. Have two or possibly three stocks you are fond of. Trade these stocks only and calibrate all your trading strategies to them; this way, you will have zero homework since you will already know what to trade every day.
Always pick stocks or ETFs that have large volume to enhance your flexibility in changing the position size. If one day the stock becomes volatile, take a smaller size and trade with a slightly larger target and stop losses. In case the stock is quiet, increase your position to recover the smaller targets and stop losses. This way, you will have the opportunity to make decent earning regardless of the day’s volatility.
Weekly Stock Screening
Every week, you should run your stock screener to identify two or three stocks that have good volatility and volume, then trade them throughout the week. You should avoid any trading stocks that are not on your list. During weekends, run the stock screener again and find another bunch of stocks. If things are going well or you, stick to the same stocks you used in the previous week.
Daily Stocks Monitoring
You may also look for stocks to trade every day. In the morning and the rest of the day, look for stocks that have the big move. This may involve doing some night homework on the stocks with highest earning the next day. Include the volume criteria to ensure that the stocks you choose have the biggest volume for day trading. For this approach, you may have to use alter services that provide you with real-time data on instant breaking or moving stocks. For instance, while using Finviz.com, you may click on the Screener tab where you would select the Top Losers, Top Gainers, or the Most Volatile.
You may also review well-known stocks every night or morning. Surveying the earning releases or company events planned for the future always results in a huge shift in prices. Keep calm until news is released regarding the stocks trading since this is the time that volatility take place.
Most people always wonder whether they need to do “homework” or watch news during or before the trading day. The answer is NO! No matter the method of day trading you choose, you do not need to watch business news, or read business analyses or even be informed of the market trends. Follow your strategy of picking the best stocks and ensure you implement it.