Choosing correct stock for intraday trading is most important task because your profit or loss depends upon stock selection. We have seen many times that market is out performing but our stock is not performing. we have to exit in loss or at cost and it also happens when we sell something. so stock selection is most important task in day trading.
- Find out market direction whether it is bullish, bearish or stable. If market is continuously in bullish zone, you should find bullish stocks to trade for intraday rather than selling anything.
- Usually stocks that give signals on technical indicators are good for trading. Example a stock which is breaking yesterdays high with good volumes is a good candidate for intraday trading.
- Volume is very good indicator of stock price . Select stocks that are rising or falling with heavy volumes compared to last 5 days average volume are good contenders of giving good intraday returns. Use intraday screeners to find out stocks that are rising or falling with good volumes.
- Another very good indicator to select stocks for intraday or even positional trading is open interest . This is applicable to stocks that are in FNO category only. Usually the stocks in which large open interest is ‘continuosly’ being built is good . If price is increasing with increase in open interest , buying may happen as traders are making long positions. You can use intraday screener to find out long built up and short built up stocks.
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