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How to Choose Day Trading Stock

To venture into stock trading as a day trader, you will require capital. You will also have to determine the ideal stocks to trade in before identifying trends. The exit or entry strategies you use will depend on the trends you identify. The stock market has an admissible minimum capital obligation, which varies based on an individual’s trading style.

Traders should have sufficient flexibility to counter trades that present different risks, and capital to combat potential losses. Here are some tips traders can leverage when picking day trading stocks.

High Volatility and Liquidity in Day Trading

Liquidity in the financial markets is the pace at which an asset can be sold or bought, or the impact of trading on a security’s price. Day trading liquid stocks is easy, and the stocks are usually more discounted and cheaper than other stocks. Further, equity that corporations with increased market funding offer is often more liquid than equity from low market cap organizations. That is because finding sellers and buyers for that specific stock is easy.

More volatile stocks connect to day trading strategies too. A stock can be considered volatile if its distributing corporation has more cash flow variance. Even though markets expect these shifts regularly, day traders can exploit asset mispricing when mitigating circumstances occur. Unpredictability in the marketplace triggers the proper day trading situation.

Financial Services

Financial services organizations offer excellent day trading stocks. For example, Bank of America is among the most traded stocks per traded shares per trading period. BoA is one of the best day trading candidates, even though the banking system is usually considered a highly speculative industry.

Bank of America has a high trading volume making it relatively liquid. For these reasons, both individual and institutional traders may want to invest in the BOA’s stocks. Consider reading more info regarding US stocks (米国株) before investing if you are among these individuals. Wells Fargo is another popular stock for day trading. Both the BoA (Bank of America), and Wells Fargo experience unpredictable industrial conditions and high trading volumes.

Consider Your Position

The stocks you pick for your day trading technique should be compatible with your situation and goals. Remember, there is no universal approach when it comes to stock trading. Consider your capital, risk tolerance, and the type of investing you will adopt.

Research extensively and remember the best way to do so is by studying the market, considering the industries that best represent your individual needs, analyzing the company financials, and starting early. By starting early, you can pace yourself based on market openings.

As a day trader, don’t be emotionally attached to any specific stock. Day trading involves monitoring patterns to determine when to enter or exit to reduce losses or make a profit. Successful day traders keep a tab on the current affairs.

While you do not have to be fixed to the news or television, you want to determine the earnings season and the condition of the economic calendar. Such information should enable you to determine the potential day trading stocks.

Trading Volume Index (TVI) and Trading Volume

Day traders regularly leverage the TVI to determine whether to invest in a stock or not. This index calculates the amount of money streaming to and from an asset. The stock volume traded indicates the number of times it is purchased or sold within a specific time within one trading day. More volume indicated more stock interest, whether negative or positive. Often, more stock volume is an indication of emerging price movement.

Social Media

Social media is fast becoming a popular day trading target. The increasing rise of digital media companies has triggered high trading volumes on their stocks. Further, there is an ongoing debate on the potential of social media companies to revolutionize their large user bases into a tenable revenue flow.

While stock prices define the discounted cash streams of their issuing organizations, recent assessments consider the company’s earning potential. Social media remains one of the most popular day trading stock industries.


Day trading can be an overly risky investment technique, but it is also highly lucrative and common among many investors. As an investor, you can succeed in today’s stock trading as long as you are conversant with the basics. Remember, variables like volatility, liquidity, volatile industrial conditions, and trading volume can help determine the best stocks for day trading.