How to Find Stocks for Day Trading
A good stock for successful day trading must have two elements: large volume and consistent volatility. If you can find a stock that has huge swings throughout the day and is fairly consistent, then you can potentially make a lot of money in a short period of time. The obvious risk is that you can also lose a lot of many quickly as well. Research will be important. Any broker can give you a list of these stocks, or if you have an online account you can track individual stocks yourself. Some firms, such as E*Trade.com, have lists of the most volatile stocks. Check weekly and monthly charts to determine patterns of volatility.
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Instructions
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Don't rush into trading without observing the pattern of a stock over a protracted period of time. Wait at least a month or two before trading. View the charts to determine if there are any predictable trends. A stock with a predictable up and down trend is ideal.
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Check the volume of the stock. See how many shares change hands on a daily basis. Beware if there is little volume, because the stock can easily be affected by any number of factors, such as institutional investors taking out money.
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Look at the broader market and economy. A good day trade stock can become a bad one, if the economy changes for the worse for that sector or that stock. Reading daily economic news will be important.
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Keep looking for new stocks that move up and down. Because the market changes constantly, day trading must be an up-to-date endeavor.
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