Stock Trading - How To Select Stocks For Stock Trading
I have actually discovered that the finest stocks for stock trading and day trading are the stocks that make up the S&P 500. It is the Nasdaq stocks that I like to trade the most due to the fact that of their volatility of the stocks in the Nasdaq 100, I concentrate on those stocks that I that I like to refer to as "trading where the action is" stocks. These are stocks that show remarkable volume in the number of shares being traded during the day, at least 15 million shares and ideally 20 million shares and more.
In addition, the stocks need to have a large everyday stock trading range, which is the difference between the high rate and low cost of that stock for the previous trading day, and a lot of volatility. I search for a trading range of a minimum of $2.00 per share, however I truly prefer those that are more volatile and have an everyday travelling variety of $3.00 to $6.00 and more.
The reason for this is that I trade both sides of the marketplace, both the long side and the short side on an intra-day basis. I have no interest in whether the stock closed in favorable, or unfavorable area the previous day, simply as long as the volume and rate action are there.
All I desire is the rate action, high volume and the volatility. If I have these 3 ingredients, I understand that the significant players are very active in that stock and they are either increasing, or decreasing their weighting in that stock. Adding to and adding to the price and volume action are what I call the "accelerators", which are the momentum players, the program traders and the hedge funds who are attempting to leap in ahead of the mutual funds and front run the stock, either up, or down. This is when the action really warms up and you will see "weather volume" where each stock trade is taking place in less than a 2nd. I have actually seen this sometimes every day. It happens all of the time.
Something that may not appear to you on the surface area is that what I have done when I pick stocks for stock trading is that I have utilized the major gamers as my research department. The money circulation is very noticeable due to the fact that most organizations are on the exact same page in terms of what they are selling and buying. This appears in the rate action, the volatility, and volume for the stocks in play. It is awfully tough for a herd of elephants to hide their foot prints in the sand.
Now with a possible list of stocks to trade. I then load those stocks into my "stock trading" watch list.
I am looking for particular patterns to develop and if I see a pattern that I like to day trade, I will pull the trigger and take the trade, either on the long side or the brief side based on what the stock (cost action and volume) inform me, what I see the marketplace makers doing on the Level II screen, and provided the stock is selling line with the chart of the Nasdaq 100.
I always have a relatively tight protective drop in place to safeguard me in case I am incorrect and took the trade too soon. I might attempt that trade 2 or 3 times prior to I get the right entry, each time taking a small lose. But when I get the best entry, there is a great deal of money to be made, especially when you remain in the ideal stock.
Among the important things I like to do is to stick with the exact same stock, as long as it satisfies my stock trading requirements. I might trade the exact same stock all week as along as it is carrying out for me and I am making great successful trades with it. One of the advantages in doing this is that you actually be familiar with the stock well, and how it trades.
To summarize, in my opinion the best stocks for stock trading are those stocks with very high velocity and high volume, high volatility and a good intra-day taking a trip variety. When you have these attributes, you understand the large institutions and the "accelerators" are associated with the stock.
For stock trading, you will need a direct access day trading account from a stock trading broker that offers direct access stock trading software application. This is an absolute need to have for day trading. The software application will have Level II, charts, technical indicators, etc. Direct gain access to implies that your buy and offer orders are sent directly to the market by you without utilizing a middle male to put the orders for you.
The very first thing you require to do prior to you even try stock trading, and this is even if you do have some experience, is to take an excellent day trading course so that you truly understand how the business of stock trading works, what patterns to search for, how the marketplaces work and how everything meshes. It will be the very best financial investment you ever make. If you don't eductae yourself - you have much better than a 90% possibility of stopping working.
* the words stock trading and day trading are interchangeable.
Best of luck and good
I have found that the finest stocks for stock trading and day trading are the stocks that make up the S&P 500. It is the Nasdaq stocks that I like to trade the most because of their volatility of the stocks in the Nasdaq 100, I concentrate on those stocks that I that I like to refer to as "trading where the action is" stocks. One of the things I like to do is to remain with the same stock, as long as it pleases my stock trading requirements. For stock trading, you will need a direct gain access to day trading account from a stock trading broker that provides direct gain access to stock trading software application. The very first thing you require to do prior to you even try stock trading, and this is even if you do have some experience, is to take a great day trading course so that you truly understand how the service of stock trading works, what patterns to look for, how the markets work and how whatever fits together.