How to Select Stock for Intraday Trading : Just buying and short selling stocks won’t make you an efficient intraday trader, and it has been seen that traders with all necessary qualities still doesn’t get success. Hitting the right stock is a crucial attribute that one need to have along with other qualities. Most of the time intraday trader faces a loss because they fail to choose the proper stock which will incur them a safe return. This article will guide with tips which will assist you in picking the right stock that will provide you steady growth.
It is always best to follow certain advice and opt for substantial research before trading a stock which will help traders to avoid themselves from any kind of downfall. Whenever you are choosing a stock never ever gets swayed by emotion or ego because they are a most disastrous factor that can make you lose all your money. So it is better to follow some guidelines which provide the path towards growth.
Top 3 Trick | How to Select Stock for Intraday Trading ?
There are around thousands of companies are listed at NSE and BSE, but all the listed shares are not qualifying for day trading. You need to select right stock which gives good momentum for intraday trading. This blog will help you to select the right stock for intraday trading.
1. INDEX based Stock Selection
- Analysis of Sectoral Indices is useful for stock selection.
- Performance of sectoral indices is very important as it helps to select stock from different sectors which perform well.
- It is important to review the sectors having good momentum. You can select the stocks by analysing performance of the sectors.
Steps to Find Out Active Sectors:
- Open nseindia.com
- Click on LIVE Market section
- Under Live Market, choose INDEX.
- INDEX will show a list of various indices i.e. Sectoral indices, etc.
Direct link: https://www.nseindia.com/live_market/dynaContent/live_watch/live_index_watch.htm
This technique is useful to identify that which sector performing well during the live market and with respect to that you can also make decisions about sectoral based stock.
2. Stock selection from 52-week High-Low Price of Stock:
- Daily Stock price fluctuates and gives four price – open, high, low and close.
- When the stock prices reach at 52 week high or low level, there is high probability of increase or decrease in the stock price respectively.
- You can select stock from 52 week high/low list for intraday trading for good moment in stock.
How you can Find Out 52 Week High – Low Price of Stock:
- Open nseindia.com
- Click on LIVE MARKET section
- In the LIVE MARKET Section, select NEW 52 WEEK HIGH-LOW.
- Direct Link: https://www.nseindia.com/products/content/equities/equities/eq_new_high_low.htm
3. Stock selection from NSE Top gainers and losers
- List of Top gainers and Losers list shows the attraction from market participants it may provide good trading opportunities or short term investing or for future derivatives trades.
- The shares coming under this top gainers / looser list provided good movement.
- To select stock for intraday from this list you can visit NSE India website early in the morning after 20-25 minutes of market starts.
- It gives more accurate result if you select stock from this list early in the morning.
How to check Top gainers / losers
- Open NSE India Website
- Select Live Market
- Under Live Market, select Top Ten Gainers/Losers.
- Direct Link: https://www.nseindia.com/live_market/dynaContent/live_analysis/top_gainers_losers.htm
Tips To Choose the Right Intraday Trading Stocks
The following points will provide some tips or suggestion which will help you hit the right stock and thus you will be able to gain a good amount of profit in your intraday trade:
- Whenever you are going for an intraday trade, always try to choose liquid stocks because it has high average trading quantity, so there is a high buying limit. Liquid stocks assist traders to buy or sell plenty of shares without facing any problem. Many follow these tips because it provides them a good return. So if you buy low volume, then it would be best to stick stocks having 50,000 to 75,000 average trading volumes.
- It is advisable never to pay attention to high volatile or unpredictable stocks because there is a chance that you will end up facing loss. This kind of volatile stocks often has a low average daily volume which enhances their unpredictability. Many intraday traders make a mistake as they buy volatile stock and wait for news to change the price the stock but at the end, it stays same.
- If you want to choose right stock in intraday trading then always opt for stocks that have good correlation with prime stocks and indices. Correlation indicates when you buy a stock of particular index or sector and if that index moves up in the market consecutively, the stock will also go up. Stocks having correlation are reliable because it won’t be unpredictable and you follow the trend.
- Always follow the trend because when you move along with the trend, you will find good return. During a bull run, always identify the stocks that have potential to rise and during bear run always choose a stock that has high chances of going down.
It is a smart move to research before starting your intraday trade like monitoring the index and then identifying a sector that goes by your niche. You need to analyze on a daily basis to predict their movement and always choose a stock that is tradable and lies top tier position in that particular sector.
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By, Virtueticks
