| In day trading stocks, you need to learn two very | | | | and the stock is not having severe liquidity problems. |
| important skills. The first and the easy one is doing | | | | You see, liquidity in the stock that you choose is |
| the right stock picking. The second is the most | | | | very important. To ensure, liquidity you chose only |
| important and the difficult one. How to trade these | | | | those stocks that were trading on average with a |
| stocks? What I mean by how to trade these stocks | | | | volume of one million shares. |
| is the right entry and the right exit. Without this, you | | | | Stocks above $100 might be overpriced and can be |
| will never succeed at your day trading endeavor. | | | | highly volatile with wide retracing swings. Stocks |
| Finding good stocks for day trading is not difficult | | | | between the range of $10 to $100 have a consistent |
| with more than 50,000 stocks listed in the US Stock | | | | intraday price patterns and are best suited for day |
| Markets. The most important rule to remember is | | | | trading. When you pick a stock in this price range, |
| that you are not an investor. Rather you are a day | | | | observe its intraday price swing. Study the past |
| trader who does not hold positions overnight. No | | | | three days data and observe the intraday chart |
| need to think long term. Keeping this fact at the | | | | patterns to see the price bouncing back and forth |
| back of your mind, you should focus on the intraday | | | | between the intraday support and resistance levels. |
| price movements of your chosen stocks. | | | | You want a stock that has a good intraday swing. |
| There are some rules that you need to follow when | | | | Don't trade stocks that are affected by government |
| doing the stock picking. These rules have been | | | | regulations. For example, a pharmaceutical stock or a |
| developed by different successful day traders with | | | | biotech stock may not be good. Suppose, an |
| experience. The first rule that narrows down the | | | | approval is pending with FDA! You are trading that |
| universe of stocks that you can choose says that | | | | stock when FDA announces more tests are needed |
| only choose those stocks that have a daily average | | | | before giving the approval. You can imagine what can |
| volume of one million shares or more. What this | | | | happen. In the same light, stay away from day |
| means is that the stock is having an average daily | | | | trading stocks of companies that are in the process |
| volume of around one million stocks daily for the last | | | | of merging. |
| many weeks and months rather than having this | | | | Forex day trading can be a much better option for |
| traidng volume for one odd day. | | | | you as compared to day trading stocks if you are |
| This rule should be followed religiously by you in doing | | | | really serious in day trading. Currency market is huge |
| the stock picking for day trading. You should try to | | | | with around $3.2 trillion transacted in it daily. Combine |
| avoid low priced stocks with high volume as well as | | | | all the stock markets in the world and they don't add |
| high priced stocks with low volume. I explain it more | | | | up to even one trillion dollar. Currency market is open |
| in the next paragraph. | | | | 24/5 unlike the stock market. So you can trade |
| Once you have narrowed down the universe of | | | | currency at a time that best suits you. There are six |
| stocks that you can choose for doing day trading, | | | | major currency pairs that make up more than 90% |
| now you need to narrow it down further with this | | | | of the business transaction in the currency market as |
| rule. This rule says that choose stocks that are | | | | compared to thousands of stocks in the stock |
| trading btween $10 and $100 per share. Now, a price | | | | market that require a lot of fundamental and |
| below $10 just,means that the stock is not well | | | | technical research. By trading only two of these |
| known and there might be some problems with the | | | | major currency pairs, you can make a lot of money. |
| company. However, a price of above $10 per share | | | | Give forex day trading a try. It is a better option! |
| gives an indication that the company has good health | | | | |