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How to Select Stocks for Intraday Trading

by | Last Updated On October 3, 2022

Simple Sureshot Rules to Select Stocks for Intraday Trading.

Here are some Simple Sureshot Rules 💡 How to Select Stocks for Intraday Trading. Pick Liquid Stocks and Never Select Too Volatile Stocks. Follow Market Trend of news-sensitive stocks one day before  and select transparent companies. Let us understand in some detail.
How to Select Stocks for Intraday Trading

7 Sureshot Rules to Select Best Stocks for Intraday Share Trading

# Rule Stocks to Select
1. Liquidity Stocks with Large Trade Volume
2. Volatility Stocks with Volatility Less than 3%
3. Correction Stocks Impacted by Sectoral of Index Movement
4. Market Trend Strong Stocks during Uptrend and Weak Stocks during Downtrend
5. News Stocks affected by Sensitive News
6. Derivative Stocks Traded in Derivatives Market
7. Transparency Stocks of Companies providing Transparent Information to Investors

What is Intraday Share Trading or Day Trading?

Intraday share trading or day trading (sometimes also called margin trading) is the practice of buying and selling financial instruments such as stock, stock options, currencies, futures contracts such as equity index futures, interest rate futures, and commodity futures within the same trading day.

With intraday share trading or day trading on margin stocks, an investor can buy or sell stocks 4-5 times more than than the amount he or she has in bank account.

Making Money with Intraday Trading

One can make a lot of money with intraday share trading, but it’s not as simple as it sounds. Day trading jobs can be done from home but generally need more time and involvement than other work from home business.

PS: It involves risks but if one can take calculated risks, he / she can make a lot of money in a short period of time. A beginner or a newbie to this business may even end up losing money.

How to Select Stocks for Intraday Trading

Here are some Simple Sureshot Rules to Select Best Stocks for Intraday Trading.

1. Select Stocks with Liquidity

If a company has a high share turnover it will have liquid stocks. Because in Intraday Share Trading, stock bought has to be sold within the same trading day, it is advised to invest in liquid stocks that have large number of potential buyers. This helps in selling stocks quickly and book profit.

2. Avoid Too Volatile Stocks

Though, Intraday is a game of volatility, it is advised to pick stocks with volatility not more than 3%. Too much volatility can be too risky and traders can lose their money.

3. Select Correlated Stocks

Correlation is degree to which two securities move in relation to each other. Pick stocks that are highly correlated to a sector or an index. If a stock market sector or index is making new high ow low, then these stocks will also move accordingly.

4. Follow Market Trend

The easiest way to earn profits from intraday share trading is to follow the current market trend. Pick stocks that has the potential to rise when the market is in a bullish and select stocks that has the tendency to fall when the market is bearish.

5. Select News-Sensitive Stocks

These are stocks that are too sensitive to news. Keep an eye on such news at least one day before and take advantage of the market reaction.

6. Pick Derivative Stocks

Focus on stocks that are also Traded in Derivatives Market. This helps in stock analysis in much better way.

7. Go for Stocks of Transparent Companies

Never Trust Companies that try to hide essential information for investor. Select stocks of companies that publically provide useful information about their business operations and stock holding and pattern.

FAQs: Intraday Share Trading

Following are the steps to do Intraday Share TRading:

  1. Open a Demat Account (Trading Account attached).
  2. Do your research on stocks for Intraday.
  3. Buy or Sell the stocks, generally after 30 Minutes of Market Opening. In India, the Working Hours of Stock Market is 9.15 am to 3.30 pm.
  4. Put Stop Loss.
  5. Sell or Buy the stocks before market close, generally 30 Minutes before the closing time.

I personally suggest beginners and even some experienced investors to stay away from Intraday Share Trading. You may earn some money for few days, but in the long run you will eventually lose your money. It is like gambling where Players NEVER Win. It is the Bookie who earns all the money at the end of the day. In this case, the Broker is the Bookie.

Conclusion

Intraday share trading can be risky. Wise selection of stocks and timely BUY and SELL Call is a must.

We hope now you have clear idea of How to Select Stocks for Intraday Trading. Please share your thoughts and ideas in the comment section below. Thanks and Profitable Investing!

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Nikesh

Nikesh is a Banker and Experienced Financial and Investment Advisor with over 20 Years of Experience in the Field of Finance and Investment. He possesses vast experience in the field of Stock Market, Mutual Funds and Investment Portfolio Management. Keep visiting for daily dose of Share Trading Tips and Tutorials.

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