How To Select Stocks For Intraday through 6 Simple Indicators…!!

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How To Select Stocks For Intraday

There are mainly two types of trading common among masses in India. One is delivery trading and the other is intraday trading. Delivery Trading is the process of buying and holding of the share at a certain period of time. Intraday trading is basically trading within a period of one trading session. Both of them imply different trading techniques. There are a number of equities or shares available for the investor to trade. Most Intraday traders use leverage to magnify the returns generated from small price movement. As intraday trades last for one trading session or day, then one needs to be extremely careful in selecting the stocks. Let’s look at the top factors to look upon before selecting any stocks:  

Quantitative Factors:   

  1. Liquidity: Liquidity is one of the most important metrics to consider before investing in any trade. Since trading requires speed and precise timing, a high liquidity of the stocks helps in getting in and out from the trade easily.  
  1. Volatility: Every intraday trader loves to see the price movement in either direction. It provides a better opportunity to trade. But if the particular stock movement is close to 3% on a daily basis, then stock is considered good for the trade. But if a stock movement is highly volatile, then it’s better to avoid the volatility.  
  1. StockTrends: Before picking any stocks, one must look upon the stock trends. Studying the past pattern of stock and try to gauge what the stock price and volume trends are telling you. In case, one has formed an opinion and price is showing different trends. Then it’s better to go with the market trend.  
  1. Clear Patterns and Charts: It’s always better to look upon the patterns in intraday trade. It will provide a glimpse about the stock behavior in future. A clear pattern on the chart will help in getting a clear picture about how many upgrades and downgrades the stock has. It gives a better base to judge the margin of safety in stock, in case if it requires any changes, you can change your intraday trading strategy accordingly.

Even though these factors are quite important, new traders do look upon certain qualitative factors too.  

  • Strong brand: A company shares with a wide reputation is widely suited for intraday too. The brand presence helps in creating good beta, which is ideally suited for intraday trades.  
  • Good Management: A company with a strong reputation of good management is also suited for intraday trades. As it helps in reducing the volatility as a result of any negative news. 

But these are secondary things to look upon before selecting any stock for intraday. 

*Disclaimer: investment in securities market are subject to market risks, read all the related documents carefully before investing 

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