Rules For Picking Best Stocks For Intraday Trading

Rules For Picking Best Stocks For Intraday Trading Intraday trading has become a popular choice of trading amongst beginners who want to make profits without wasting time. With the proper techniques, intraday trading can be profitable. However, the

proper techniques, intraday trading can be profitable. However, the right tools and techniques for intraday trading fundamentally differ from other investing types. Intraday trading requires extensive market knowledge as the shares are traded within an hour, and the chances of error are very low. Hence, the stock selection must be accurate.

This blog will help us understand how to select the best stocks for intraday trading.

What is intraday trading?

It is also known as Day trading, which means trading stocks on the same day. The prices of shares fluctuate throughout the day, and the traders try to draw profits from the fluctuation. Let us dive into the main point; how to select the best stocks for intraday trading: 1. Choose liquid stocks The biggest concern for an intraday trader is the liquidity of a stock. As the stock must be exchanged within the same day, investing in a liquid stock is extremely important. It would help if you looked for stocks with high volumes as you can trade them in large quantities.

2. Avoid volatile stocks The profit in intraday trading highly depends on price movements. But it is recommended to avoid highly volatile stocks, and it would be best always to execute intraday trade using a stop loss.

3. Follow market trend The market trend determines the movement of specific stocks. An easy way to maximise profits is to follow the current market trend, whether intraday trading or long-term trading. Choose a stock that can rise potentially even when the market is down.

4. Opt for brokers that offer the best services Intraday traders use advanced charting tools, research and analytical tools to identify support, resistance levels and past stock performance.

Not every stock broker provides every tool required for intraday trading; hence, it would help if you are looking for a stockbroker to offer these tools as a part of the package. Also, open a Demat account with the same stockbroker.

5. Look for transparent companies.

It is always good to choose stocks of companies with sufficient information about their business operations in the market. Decisionmaking becomes easier when you are well-versed with the information. You may take the wrong position if crucial information is hidden, which could lead to losses. Traders should choose only companies with transparent business processes for intraday trading.

Stable management is another factor one should consider before selecting a stock for intraday trading.

6. Choose stocks which traders can trade in the derivatives segment.

Opt for companies that also trade in the currency derivatives market in India. Due to diversification, research work is essential to analyse the stock better and make an informed decision.

7. Trade news-sensitive stocks One of the best strategies for selecting the best stocks for intraday trading is to choose stocks that generally go with any developments reported in the media. It would help if you were cautious while trading in stocks that react heavily to the news as it may lead to adverse results. To cut the risks of an unexpected movement, you should always trade with a stop loss

always trade with a stop loss.

In your intraday trading journey, consider taking advice from an investment advisor like LKP Securities. They can help you understand all of the factors while guiding and educating you about the world of intraday trading in stock markets.