Day trading is an exciting way to make money. If you do it right, it gives you the rush of gambling with a lot less risk. If you do it wrong, you could be sitting at your laptop frustrated and wanting to throw it out the window.
If you’re looking to get into day trading, you’re in luck. We have some tips for finding the best day trading stocks on the market right now for you to dip your feet into. Once you get started, you’ll be well on your way to being a mini mogul!
Look for Stock with High Liquidity and Volatility
If you’re just getting into stock trading, we’ll explain this for you. Liquidity refers to how quickly an asset can be bought or sold in the market. If you’re day trading, you want high liquidity, because you want to get rid of it at the drop of a hat.
Volatility refers to stocks with high variances in prices. These stocks can be risky, but they are also the ideal day trading stocks because you can make a lot of money in a short amount of time if you can capitalize on asset mispricing.
When looking for stocks, remember that you don’t need to limit yourself to American stock exchanges. Stocks in tech-savvy countries such as India and the United Kingdom are often overlooked by American day traders and can be highly profitable.
Look at Trading Volume
The trade volume index, or TVI, measures the amount of money that goes into and out of a particular asset. While you can use the trade volume index for any period of time, most day traders look at the volume for one day.
Higher volume means that more people are interested in the stock, and its price is likely to change a significant amount. However, this price movement could be positive or negative, so it’s always important to research more than just the trading volume of a stock before buying it.
Don’t Trade Too Many of the Best Day Trading Stocks at Once
One mistake many new day traders make is that they get too excited and trade too many stocks at the same time. This can be an absolutely devastating mistake for your portfolio.
Day trading takes quick reflexes and fast execution. You’re intently monitoring for any price change in stocks, and pulling the trigger on a trade the instant it goes in your favor.
Think of it this way: you wouldn’t play five games of speed chess at the same time because you’re likely to feel rushed and make a mistake. The same applies to day trading. While you’re executing a trade on one or two of your stocks, a third one could be decreasing in value without you noticing.
We recommend day trading two stocks at a time, and definitely no more than three. When you sell one, buy another. This keeps the portfolio constantly changing, but without as much risk of overlooking a certain stock.
Making the Most of Your Day Trading Profits
Now that you’re prepared to find the best day trading stocks on the market, keep reading for more valuable information.
We have the advice to help utilize your newly found cash flow, along with tips on everything from digital marketing to new technology. Happy trading!