Selecting the best stocks for intraday trading is important because an unforeseen development with respect to the stocks can result in massive losses within a small time period. With the thousands and thousands of stocks to choose from, it is important to know about the qualities of good intraday trading stocks in order to choose the best among the lot. HQBroker Review lists the characteristics to look for in the stocks for intraday trading.
Sufficient stock volume is required to enter and exit trades on demand. The ease of entering and exit positions is directly proportional to the volume of the stocks. Liquid stocks have high volumes which enable them to be bought and sold without having any affect on the price. Thus, liquid stocks ensure that the trader is not left without a market when the positions are squared at the end of the trading day.
The volatility varies from stock to stock. Some stocks move just 0.5% each trading day while some may move 1-2% per day. Highly volatile stocks are unpredictable and can even move more than 5% in a single trading day. The best stocks for intraday trading are the ones which move at a moderate pace. Movement of 0.5% to 2% per day is considered to be ideal for intraday trading. These are small price shifts which generate profit and not massive swings. Highly volatile stocks with more than 5% movement become tough to handle for the traders. However, highly experienced traders do trade in highly volatile stocks.
The stocks which move in accordance with their particular sector or index are reliable because the movements can be predicted. For example, if the sector or index rises, the stock price is also bound to increase.
Thus, the Intraday Trading Tips are helpful in order to pick the best intraday trading stock are.
- High volume
- Moderate volatility
- Predictable movements