How To Select The Stocks To Trade Intraday

How To Select The Stocks To Trade Intraday

Learn more about how you should select which stocks to trade intraday. Intraday trading is not one of the easiest ones to do because you need to be quick here. You need to analyze the trade and take a trade within minutes. The intraday market keeps giving your opportunities and thus you need to be quick to scan through the stocks to trade in the market.

Tips to follow when you trade intraday

An intraday trader closes off all his positions at the end of the trading day. This means that he does not carry any of the positions overnight. So when you select the stocks to trade intraday take care that you choose the stocks that have a good ATR.

What is ATR? ATR is the average true range. This is basically the average of how much the stock has moved in a day for the last 14 days. The more is the ATR the more the stock moves on a particular day. Thus if the stock hardly gives any movement it will be of no use to trade in. So your stock list should have the stocks that have a good ATR value.

Also stay way form illiquid stocks when you trade intraday. This is because the spread to trade on these stocks is high and also you may not get a buyer or seller quickly when you wish to sell the stocks. The best is to stick to the blue-chip stocks when you trade intraday.

How to pick up the stocks

The best way is to spot trading opportunities at the end of the previous day. Look at how the stocks have performed and then pick up stocks that show a level close to where they closed. So suppose the stock closed close to a demand level then there could be chances that the next day the stock may open at the demand level itself thus giving you a good trading opportunity.

Trade with the index

The index could be in positive but this does not mean that all the stocks would be in green. Before deciding on which stocks to pick up first analyze the index. Understand what it could be doing the next day. If you think that the index would be going up the next day then pick up bullish stocks. If you think that it is going to be negative then you need to look at stocks that could be bearish.

The best idea is to stick to a few stocks only. So pick up a few that you think are bullish for the day and a few that you think could be bearish. Then based on how the index is performing start to take trades.