Day Trading Stock Picks

Written by Jacey Harmon
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Day trading relies heavily on capitalizing on price momentum of stocks and stock indexes. Finding day trading stock picks can be a tricky proposition when you consider there are around 10,000 stocks available on the NASDAQ and New York Stock Exchange. There are services available that help narrow down the market to few day trading picks for traders to use.

Ingredients for a Good Day Trading Pick

Price momentum is a very important part of day trading stocks. The goal of day traders is to pick off a few cents several times a day so it wouldn't do any good to picking a stock with no price movement. Price momentum can be created by several different factors. New events such as an earnings announcement or mergers can create large price fluctuations in a stock. A stock clearing a resistance level can also create high price movements as investors buy or sell due to the apparent change in a price trend.

High liquidity is another factor that day traders need to take into consideration. As noted above day traders buy and sell several times a day. Without high liquidity, or activity, a day trader will have no one to sell when trying to pick off a few pennies. A stock that trades an average of 50,000 shares a day may not be as great of a day trade as a stock that trades 1 million shares a day.

Day trading in theory sounds very simple--how hard can it be to pick off a few pennies? In reality it is very tough and requires confidence and quick decision making. Having the ability to place the buy and sell order at the right time is something that day traders need to have. In the fast paced world of stock trading those who snooze lose. There is a day trading culture that has arisen on the Internet that can help a trader find good trades as well as build confidence with a trading strategy.


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