3 Tips to Daytrading Stocks by Scott Cole

The first thing that you must do to find stocks suitable for daytrading is screen for liquidity and volatility. It makes no sense daytrading an illiquid stock, because you will get killed by the wide bid/ask spreads. Furthermore, it only makes sense to trade volatile stocks, those that regularly move 3-5% in a day.

Second, you need to figure out your choice of weapon. Are you interested in scalping for profits, or looking for big 1 to 3 day moves (sometimes referred to as swing trading)? My personal preference is the latter.

Finally, once you have figured out your style of trading, learn to identify those stocks that are ready to move TODAY! There are a variety of patterns that show some statistical significance in leading up to sizable moves.

I recommend the TC2000 program by Worden Brothers. With this program, you have the ability to screen thousands of stocks and narrow them down to the handful that are solid daytrading and swing trading candidates.

About the Author

Nearly 20 years experience in trading stocks, currencies and commodities; former hedge fund execution trader and formerly registered as a Commodity Trading Advisor (CTA). To learn the 3 Biggest Mistakes Made by Daytraders, check out www.bestdaytradingstocks.com.