Did you know that the Australian stock market index gained more than 500 points just since January? That’s enough for anybody investing in the market to enjoy a healthy profit.
At the same time, some companies on the market were much more successful while others were far less successful.
Succeeding on the stock market is all about picking the right companies to invest in. That applies just as much if you are wanting to know how to pick stocks for day trading as it is for a longer-term investment.
So, how can you make sure that you pick the right stocks for day trading? Read on to learn all about the top tips for selecting stocks to day trade with!
Pick Stocks With the Right Price
Stocks can go up and down, but in the short term, they tend to continue in the same direction. That means that for day trading, you want to pick stocks that have started going up earlier in the same day.
Of course, that is only with ordinary trading. You can also short stocks to make money off of stocks that go down. If you can find a stock that has started trending down earlier in the same day, you can short it to make a profit
You can also keep an eye on price gaps. When the market first opens up, there is sometimes a jump in a stock price. If you find stocks with jumps like that, you can expect them to continue to move in the direction of the jump later in the same day.
That is not a hard and fast rule, but it works some of the time.
Look For Stocks With Volatility
The dangers of day trading are not as simple as losing money. There is also wasting time. You don’t want to invest in a stock that stays at exactly the same price all day. Instead, you want volatile stocks.
You also don’t want stocks that simply move as much as the market moves. Instead, you want stocks that move more than the market. Compare a stock’s movement to the movement of the index and skip stocks that don’t move more than the index.
Look For Stocks With the Right Volume
The more volume a stock has, the more likely it is to go significantly up or down. Find stocks with high volumes and prioritize investing in them.
The more you know about how to pick stocks, the more prepared you will be for stock trading. You should brush up on all the best stock trading tips before you buy stocks or sell stocks.
To learn more about investing in the Australian stock market and where you can do it, check out https://www.monexsecurities.com.au/investing-in-australian-stock-market/.
Know How to Pick Stocks for Day Trading
We hope that this brief article on how to pick stocks for day trading has been helpful for you. It can seem daunting to figure out stock investment at first, but it is itself an investment that will pay off for the rest of your life!
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