Profitable intraday trading Strategies[Updated]

There is an immense number of equities to select from. Day traders can pick any stock of their choosing. Hence, the first step for a day trader is to reckon what to trade. Next, the trader identifies a trading opportunity - a stock, many stocks, or ETFs. The forthcoming step considers ways to make profitable intraday trading a reality.

Selecting stocks for intraday trading

Liquidity

Liquid stocks tend to have high volume numbers. This permits larger quantities to be bought and sold. As a result, there is no significant affecting on the price. Since intraday trading strategies are contingent upon speed and exact timing, the high volume allows easier entry and exit of trades. Depth is also crucial since it demonstrates how much liquidity a stock has at diverse price levels above/below the ongoing market bid/ offer.

Medium to high volatility

Fay traders need price movement to make money. Day traders may opt for stocks that tend to have a lot of movement, either in percentage terms or dollar terms. These filters frequently lead to produce varied outcomes. Stocks tending to move 3% or more each day have sizeable intraday moves to trade. This also applies to stocks that move in excess of $1.50 each day.

Group followers

The majority of traders aim at equities that correlate with their movement with respect to their sector and index group. In other words, upon the index or sector ticking upward, the individual stock’s price appreciates as well. In case the trader wishes to be trading the strongest/weakest stocks eerie day, this is vital. When a trader chooses to trade the selfsame stock daily, it is wise to concentrate on that one stock. Any correlation is not highly relevant here.

Entry and exit strategies

Particular strategies will help your profit from even the best stock. Diverse intraday strategies abound. However, it is essential that you go per guidelines. There’s a better likelihood of your succeeding, when you search for crucial intraday trading signals.

Trading just with the ongoing intraday trend

The trader is concerned with riding the waves that characterise the market. Concentrating on taking long positions during an uptrend. During a downtrend, focused on taking short positions. Intraday trends do not keep going without end. However, one or two trades may be made prior to a reversal taking place. When the dominant trend shifts, start trading with the new trend.

Trend isolation is the tricky part. However, Trendlines give a straightforward entry and stop-loss strategy.

More trendlines may be drawn whilst trading in real-time to see the changing degrees of each trend. Drawing in more trendlines offers more signals, besides giving greater insight into the impacting market dynamics.

Trading during trends

Opting for the best stocks for intraday trading, most traders will find it profitable dealing with ETFs and equities that have a moderate to high correlation with the better-known indexes. It subsequently becomes easier to isolate the stocks that are strong/weak relative to the index. For example, when the index moves up 1%, a strong stock may move up 2%. Stocks with a tendency to more movement afford more opportunity.

Traders ought to target buying stocks that move up faster than the futures when the indexes and market futures are going up. A strong stock does not pull back as much, when the futures pull back. Since they lead the market higher, these stocks are the ones to trade in an uptrend.

Short-sell stocks that plunge more than the market can be profitable when the market futures and indexes are plummeting. A weak stock will not move up to such a degree when the futures move higher within the downtrend. So when the market is falling, weak stocks offer more profit potential.

Notwithstanding specific sectors being comparatively strong or weak for weeks at a stretch, the stocks and ETFs that are stronger or weaker relative to the market may undergo daily change.

Short sellers ought to isolate ETFs or stocks that are comparatively weak. So, when prices plunge, in all likelihood, you will be in the ETFs and stocks that will fall the farthest. This would increase potential trade profit.

Patience waiting for the pullback

Trendlines are just a rough guide for where price waves will start and terminate. Hence, when you are opting for intraday trading stocks, traders may use a trendline for earthly entry into the forthcoming price wave in the trend direction.

There will be losing trades, since trends do not keep going on without end. However, as long as you make the overall profit, that will be all that’s important. Losses will have been compensated.

Conclusion

Picking the right stocks for intraday trading is concerned with isolating the ongoing market trend from the encompassing noise. The trader’s task then is to capitalise on the said trend. Particular features - volatility, liquidity, the correlation - characterise the top intraday trading stocks. However, it remains essential to apply the appropriate entry and exit strategies. That’s where being a good student of trendlines and charting price waves helps in the project.