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How to pick stocks for intraday trades?
by Pankhudi Dave Head Finance ManagerTrades in the stock market can be done using fundamental indicators or technical indicators. Fundamental trading can take a long term whereas technical indicators generally aim for a short holding period.
Intraday trading is a type of strategy where shares are purchased and sold in a very short period of time. This period of time could be a couple of minutes, an hour or a few hours. But all trades are squared off on the same day.
Before opting for intraday trading, it is very important to learn how to choose stocks for intraday trading. A lot of this depends on day trading technical analysis. Price charts and figures help to decide the right stocks to trade in. Understanding which stocks to trade and pick is the crux of intraday trading.
Tips to choose intraday trading stocks:
Liquid stocks mean stocks which see a lot of action in terms of buyers and sellers. Picking a stock that has few buyers or few sellers will mean the price won’t fluctuate as much. Illiquid stocks may not see buyers and sellers executing orders the same day. Intraday trading relies on executing timely orders on the stock market’s order placing mechanism. It is imperative for you to close out all open positions at the end of the day. An illiquid stock may not allow you to close positions because of lack of buyers or sellers. There are a few indicators to check for this. You can check the market depth to see the number of shares being bought and sold and the prices at which these orders have been entered.
2. Do not trade in stocks which are in the news:
Stocks may be in the news because of their results, sectoral or business-related news or any other disclosures or filings made with regulators. Stocks may also be in the news for any irregularities discovered. New business prospects, merger and acquisition news can also bring the stock to the market’s attention. However, choosing these stocks can be hazardous since the prices can swing wildly. It is better to opt for stocks that you have analyzed using day trading technical analysis. These stocks have a sound basis for their price movements.
3. Avoid highly volatile stocks:
The stock exchange categorizes stocks into different categories. Some categories like S, T, Z are stocks that are highly risky to invest in. Before picking a stock, it is better to check the
4. Follow the broad market trend:
One important thing to remember while picking stocks is to note the share market’s broad trend. If the market is in a bull phase, then you need to pick the stocks that are in line with the trends. As you gain more experience in analyzing technical indicators for day trading, you can pick value picks that are not entirely dependent on the market.
Once you learn how to pick stocks for day trading in India, you can start making small intraday trades through your trading account. The process has a learning curve which gets better as you keep making more trades.
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About Pankhudi Dave 
Head Finance Manager
9 connections, 0 recommendations, 46 honor points.Joined APSense since, July 2nd, 2019, From Mumbai, India.
Created on Jan 27th 2020 03:45. Viewed 324 times.
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