Trendlines are simply an approximate visual guide for where price waves will begin and end. Therefore, when you are selecting stocks for intraday trading, traders can use a trendline for early entry into the next price wave in the direction of the trend. This allows for larger quantities to be purchased and sold without significantly affecting the price. Because intraday trading strategies depend on speed and precise timing, a high degree of volume makes getting into and out of trades easier.

For ideas on how to trade the stocks listed on this page, see How to Day Trade Stocks with a Trend Strategy. The article provides more details on day trading in general, stop losses, position sizing, when not to trade, and a number of entry and exit methods. The following best day trading stocks are ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.

How Do Day Traders Determine the Liquidity of a Stock?

Trader WorkStation includes essential features for day traders, such as hot keys, which allow traders to rapidly place preset orders with the stroke of a single key. Traders also have access to Level 2 quotes, which show the best bid and ask prices from each market participant. Time and sales data, sometimes known as “the tape” is also available. This is a streaming record of all stock transactions made throughout the trading day, including trade size, price and time.

• For beginners, though, it may be better to read the market without making any moves for the first 15 to 20 minutes.
• That’s because it can help a trader to identify the short-term trading patterns and trends that are essential for day trading.
• He started as a floor clerk at the Chicago Mercantile Exchange (CME) in the currency futures pits.
• These stocks tend to trend in one direction throughout the day on higher than usual volumes, making them ripe for profiting off of even after the initial surge.

You would do this over and over again as long you believe that the stock price would stay in this range. The trend and range of investments are other components to consider. There are range traders, trend traders, and those that do both effectively. Prices move quickly, often several percentage points in a day or several cents in seconds.

Direct Access Brokers vs. Brokers Selling Order Flow

A day trader may find a stock attractive if it moves a lot during the day. That could happen for a number of different reasons, including an earnings report, investor sentiment, or even general economic or company news. TradeStation gets an honorable mention in our listing, thanks to its combination of long-tested trading technology and in-depth research resources. Cobra’s day trading platform, TraderPro, is well equipped with advanced charting capabilities. It features Level 2 quotes, hot keys and a locator to find stocks to borrow for short trading.

Now that you know some of the ins and outs of day trading, let’s review some of the key techniques new day traders can use. If you decide to stop day trading, you’ll want to contact your brokerage and ask that they remove the minimum equity requirement from your account. But research has shown that only 1% of day traders consistently earn money; many, many lose it. It’s essentially a full-time job, because you need to constantly be watching — and timing — the market, waiting for your next move.

Best Stocks and ETFs for Day Trading

Keep yourself informed about the selected companies, their stocks, and general markets. Another feature we’d recommend is a broker or trading platform that offers paper, or virtual, trading, so you can practice with simulated trades before the real thing. The web-based Zacks Trader offers interactive charts, streaming market data and other tools. Obviously, the merits of ISI as an investment have nothing to do with the day trader’s actions.

• Focus on the stocks that have the biggest Change from Open, either to the upside or downside.
• These people have access to the best technology and connections in the industry.
• A margin account allows you to place trades on borrowed money.
• A successful day trader does not leave room for impulse purchases.

Many of them add an additional level of risk by using leverage to increase the size of their stakes. If you’ve already mastered the basics of investing, day trading can be an excellent way to make money quickly. Dan Blystone has over a decade of experience in the trading industry. He started as a floor clerk at the Chicago Mercantile Exchange (CME) in the currency futures pits.