Since you are here and reading about day trading you probably already know about stocks and how to trade them. Usually stock trading is meant for traders who are in it for the long haul, but if used correctly they can be quite profitable for day traders as well. In the article i will get a bit into how stocks can be good for short term positions and which stocks are used a lot by other day traders.
Trading Stocks as a Daytrader
Trading stocks as a daytrader can require a good amount of time, and usually some of it spent in the morning so you get to start as the markets open. So if you are not in day trading to make a living of it, stocks might not be the right choice.
When you trade stocks the conventional way your start capital has to be rather substantial if you want to turn a real profit, but given the leveraged nature of day trading, you do not need that much capital to turn over significant profits. You will have to remember that the leverage can also mean greater losses.
The short term nature of the day trading can make it harder to spot the trends on stocks, but this is why many traders only trade in a single stock per day. This way you can research that one thoroughly and follow all the news relevant to it and make your moves when it makes sense.
But Which Stocks to Choose
The stocks you are looking for are the ones with a lot of price fluctuation and with large quantities of trades being carried out. These two indicators will let you know which stocks to trade and when to enter and when to exit them.
Finding out how many are being traded within a certain time on a certain market can give you a hunch about the stock in question; you should especially look for the stock with big spikes in the quantity being traded. Spikes can mean big movements are coming and that is where the real money is made.
Stocks with a lot of movement are perfect for day traders. A lot of ups and downs mean you can open positions and close them again fast, making profits no matter what way it shifts. This kind of trading is high paced and requires you to be very active.
Some of the popular stocks for day trading these days are S&P 500, Apple and Facebook. S&P 500 is particularly popular because of the sheer volume of shares being traded per day. It is not rare that this number goes above 100 million. This gives you the possibility to make positions of almost any size that you seem fit according to what price movement you can spot.
But make sure not just to look around in the top lists provided by whatever platform you are using. Go dig around a little and you can find some hidden gems.
I hope you have gained a little more knowledge about the exciting world of stock day trading after reading this. But before you jump head first into it, go educate yourself on the business of stock trading and what the different brokerage can offer you and if it accommodates the strategy you have in mind.