The method that will be described in this material is ideal for intraday trading and partly for swing trading. Day traders (day traders) enter and exit their positions on a daily basis, only occasionally holding positions overnight. Intraday trading involves opening from 5 to 10 transactions per day. Day traders work on timeframes from 5-minute to hourly charts.
Before trading it is important to:
- Read the news.
- Check all economic dates.
- Find information about companies reporting on your trading day (if it’s reporting season).
Resources with information
After conducting the search work, it is time for the trader to look for stocks that can “shoot” on this day. The most well-known site for searching and filtering stocks is Finviz.com. This is an analytical site that contains the maximum amount of information about any public company: news, reports, economic dates, filter system, technical analysis, and much more. You can use other resources with similar functionality.
Filter settings
- To use the search resource, click on “Screener” in the top line. In this tab, you can select both fundamental and technical search filters. It is recommended to start with “All”. After that, a huge number of filters for customization will open.
- An intraday trader should pay attention to the following indicators of the stock:
- Country – you need to put USA.
- Gap – in this filter, you can set the gap percentage from 0% to 20%, or choose – Gap UP / Gap Down. It is recommended to choose a gap without interest.
- Relative Volume – we recommend setting this filter above 1.
- Average Volume – liquidity is important for an intraday trader, so you need to set a filter at more than 2 million.
After these steps, you will see a list of stocks that fall under the specified characteristics. Then comes the next stage.
What to do with the stock list?
Perform technical analysis for each stock from the filter. For this you need:
- Draw price levels and trend lines.
- Conduct candlestick analysis.
- Evaluate the technical indicators that you use in your trading system.
After all this, you will have many times fewer companies left. 10-15 different promotions will be enough. This sample is just in case your plan doesn’t work and the stock doesn’t go your way.
The generated list of tickers should be written down in a notebook or in an electronic document/spreadsheet.
Next to each company, it is important to write down:
- Target.
- Position volume.
- Entry price.
- Stop order.
- Price levels (optional).
- If the company reports, then you need to specify when (After Market Close or Before Market Open).
All these entries are made on the basis of your technical and fundamental analysis. During an open trading session, you must strictly adhere to the plan and trade on its basis.
Conclusion
You can easily find a stock for intraday trading thanks to many useful resources. Do not limit yourself to the described filters, experiment. Set up Short Float, P/E, Volatility, Beta, and so on.
Finding stocks for intraday trading is not an easy task, as it requires experience and time. But on the basis of the stocks found, the trader forms his trading plan, which he must adhere to. Finding a good stock is an 80% success rate. Direct trading takes much less time and effort. However, successful traders always have well-chosen stocks and a plan of action.
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