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Want to be a Day Trader? Learn How to Pick the Best Stocks Now

Introduction to Day Trading Stocks

Day trading stocks is a popular form of investing that allows traders to buy and sell stocks within a single day. The goal of day trading is to make profits from small fluctuations in the prices of stocks rather than long-term capital gains. Many traders find day trading stocks to be an exciting and rewarding form of investing.

Choosing the best day trading stocks is important to your success as a day trader. Selecting the right stocks can make all the difference between making money and losing money in the markets. In this guide, we provide you with information on different types of stocks to consider, factors to consider when picking stocks, how to analyze stock patterns, setting risk strategies and finding reliable sources for stock research.

Our aim is to create an insightful guide that will help you become more informed about day trading stocks and give you the confidence to invest in this type of market. So let’s get started!

Types of stocks for day traders

Before investing in stocks, it is important to understand the types of stocks available for day trading. Day trading refers to making frequent trades throughout the day and exiting before the market closes. There are various types of stocks that are suitable for day trading, including penny stocks, blue-chip stocks, and foreign stocks.

Penny Stocks

Penny stocks, also known as micro stocks, are stocks that are typically less than $5 per share and often involve companies with small market capitalization. These stocks are generally too risky for long-term investments, but they are perfect for day traders who strive to make quick profits. This is because penny stocks can be bought and sold quickly due to their low prices, but they are also highly volatile.

Blue-Chip Stocks

Blue-chip stocks, on the other hand, involve larger companies with a proven track record. These stocks are generally more expensive when compared to penny stocks, but they also offer more stability and visibility, which makes them ideal for day traders. Blue-chip stocks can also be easier to trade due to their larger liquidity, which means that traders can get in and out of positions quickly.

Foreign Stocks

Foreign stocks, or international stocks, involve companies listed on exchanges located outside the United States. These stocks can offer great opportunities for day traders, since these markets can be open at different times from the US market. This can provide traders with the flexibility to take advantage of different market conditions and maximize their profits.

Important Factors to Consider in Choosing the Best Day Trading Stocks

Choosing the best stocks to day trade is essential in order to maximize profits and minimize losses. Before diving into day trading, it’s important to familiarize yourself with the factors to consider when selecting stocks.

It’s important to note that these factors do not guarantee success and that past performance may not indicate future performance. Ultimately, each individual’s experience will vary depending on how they use these factors.

  • Liquidity: Liquidity refers to a stock’s ability to be easily bought and sold in the market. Generally, stocks with higher liquidity will move faster, which can be beneficial for day traders.
  • Performance History: It’s important to research the performance of the stock over time before investing money in it. Look at the past performance of the stock, including any trends and anomalies.
  • Trading Volume: This is the number of shares traded daily and is an important metric to consider. A stock with high trading volume gives investors more confidence that their trades will be executed quickly and easily.
  • Volatility: Volatility is a measure of the price movement of a stock over time. Stocks with higher volatility tend to have bigger swings in their prices, so it’s important to gauge how volatile a stock is before trading.
  • Market Capitalization: Market Capitalization, or market cap, refers to the total value of a company’s outstanding shares. Companies with larger market caps tend to be more stable and less risky but may offer less potential for quick gains.

Knowing these factors and understanding how each factor could affect the end result is key to becoming a successful day trader. Taking the time to research each stock you’re considering is an essential part of day trading and can help you make better decisions.

Analyzing Stock Patterns

For day traders, one of the most important aspects of successful stock trading is understanding and analyzing stock patterns. Knowing the trends of the market can help traders predict the direction of price movements, which will in turn help them make more informed decisions when selecting stocks for day trading.

There are a few different approaches to analyzing stock patterns. One of the most common is technical analysis which involves studying past price movements of stocks to identify potential trends. Day traders who use technical analysis will pay close attention to charting tools such as candlesticks, bar charts and moving averages, in order to gain valuable insights into the direction of the stock price.

Another approach is fundamental analysis, which takes a longer-term view of the market and looks at factors such as the performance of the company, industry trends, and macroeconomic conditions to determine the direction of a particular stock.

Day traders should also be aware of news events that could affect the stock they are trading. Many times, news events can cause sudden and drastic price movements which can present an opportunity for day traders to make profits. By keeping track of news and events related to the stocks they are considering, day traders can make sure they are making informed decisions.

Finally, it’s important to remember that analyzing stock patterns is an ongoing process. Traders should constantly review their strategies and examine their results in order to improve their success rate. By developing an in-depth understanding of the market and its potential movements, traders can increase their chances of making successful trades.

Setting Risk Strategy

Day trading is a highly speculative venture and to succeed, it is important that traders develop a strategy to manage the risk they take with each trade. This includes setting predetermined stop loss limits, planning suitable position sizes and knowing when to cut losses. Without an effective risk management system, it’s easy to lose money quickly in the markets.

Having well-defined strategies for risk management can help traders stay disciplined and focused on their trading goals. One popular strategy for day traders is to set a maximum loss per trade and to limit their exposure to risk (usually a percentage of the total account balance). Properly calculating the exposure helps in making sure that traders don’t put too much of their capital at risk, and allows them to evaluate the overall risk associated with each trade.

Additionally, day traders should also have a plan for exiting trades. This should include determining whether to take profits when a trade moves in the trader’s favor, or if the trader should exit a losing trade if it reaches a predetermined level of loss. By having exit strategies in place, day traders can stay disciplined and avoid any “emotional” trading decisions.

When setting up their risk strategy, day traders should also consider the costs associated with trading. These include the commissions, fees and slippage associated with each trade, as these can all add up quickly if the trader is not careful. By researching these costs ahead of time, day traders can make sure they are getting the best deal while also limiting their risk.

Finding Reliable Stock Resources

As a day trader, one must be aware of reliable stock resources that will help you make informed decisions when selecting stocks for day trading. There are numerous tools and websites that provide helpful data and information about the stock market and stock prices. Utilizing these resources can help you stay up to date on the latest market developments, keep track of the performance of the stocks you are interested in and get an in-depth analysis of the stocks that you might want to invest in.

When finding stock resources, be sure to look for trusted sources. You should also take into consideration how much information the resource provides—some resources may offer more detailed or up-to-date data than others. Additionally, be aware that some resources may require a subscription fee; however, there are a variety of free resources as well.

Below is a list of reliable stock resources available:

  • Bloomberg: Bloomberg offers several stock tools and real-time market data for traders, including price quotes, news, charts, and more.
  • Yahoo! Finance: Yahoo! Finance provides lots of data for day traders including market news, charts, analyst ratings and historical quotes.
  • NASDAQ: The Nasdaq website provides real-time stock price quotes and market news for traders.
  • Google Finance: Google Finance offers a comprehensive range of stock data, including stock charts, quotes, and news.
  • Investopedia: Investopedia is a great source for financial news and educational resources on investing and trading.

Utilizing these resources can give you an edge in the market and help you make smart decisions when trading stocks. It is important to research thoroughly, review the important stock data points and select the best stocks to invest in.


Day trading stocks can be a rewarding and profitable venture. To achieve consistent results, it is important to pick the best stocks that best meet your criteria and risk profile. As you become more experienced as a day trader, you may want to experiment with other strategies such as short-selling or day trading options. Regardless of the strategy chosen, proper risk management and employing tools such as stop orders are essential for minimizing losses and protecting your investment capital.

Always remember to research stocks thoroughly and evaluate them carefully before executing any trades. Taking the time to do this can help you build a more secure portfolio and make informed decisions. Additionally, reliable financial resources such as news websites, broker reports, and analysis articles can also be helpful for gathering information about stock prices and market trends.

By following these tips, day traders can increase their chances of success in the stock market. With patience and determination, the possibilities for profits are endless!

Frequently Asked Questions

  • Q: What is day trading?
    A: Day trading is the practice of buying and selling stocks within the same day. This can be done in an attempt to gain short term profits but it can also carry some financial risk.
  • Q: What types of stocks are good for day traders?
    A: Penny stocks, blue-chip stocks, and foreign stocks are all stocks that are suited to day traders. Each of these stocks offer different levels of risk, reward potential, and liquidity.
  • Q: What factors should I consider when choosing the best day trading stocks?
    A: Factors to consider when selecting stocks for day trading include liquidity, performance history, trading volume, volatility, and market capitalization.
  • Q: How can I analyze stock patterns?
    A: You can analyze stock patterns by researching the stock price histories to determine potential trends that could be exploited by day traders.
  • Q: What strategies should I use for setting risk?
    A: Setting a risk management system for day traders is key for achieving desired results. This means setting up strategies to minimize losses and maximize profits.
  • Q: Where can I find reliable stock resources?
    A: There are a variety of websites and online sources that provide information on price movements and data related to the stocks you’re looking at. Doing research and due diligence on your target stocks is essential.
  • Q: What tips do you have for improving my day trading skills?
    A: Research your target stocks, test strategies using paper trading, and learn to read market signals. Picking the best stocks is also important in order to increase success rate.

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