How to Select Stocks for Intraday Trading? It’s a vast Question. One of the most dilemmas or difficulties faced by traders is a selection of good stocks. Out of the 5000 listed companies on BSE and 1500 on NSE and many more emerging, it becomes difficult to choose the few right stocks and invest in them. Moreover, it becomes even more challenging to scan and select a few shares for the Day. To make the complex selection process easy, the following are a few techniques for How to Pick Perfect Stocks for day trading? That can be helpful as well as prove profitable.

Video Credited: Trading Fuel || Research Lab

#1. Price-Based Trick

Each stock price fluctuates daily giving daily open, close, high, and low prices. Among these four prices, high and low prices can be beneficial to select Stock.

When prices rise 52 weeks high or fall below 52 weeks low, there are chances of an increase or decrease in prices respectively. Such a signal can be helpful to know

Whether to trade in a particular stock or not.

Step to Find Out 52-Week High – Low Prices of Stock :

  1. Go to nseindia.com
  2. Select LIVE MARKET
  3. Under LIVE MARKET ANALYSIS, select NEW 52 WEEK HIGH-LOW.
  4. Direct URL:

https://nseindia.com/products/content/equities/equities/eq_new_high_low.htm

NSE-India-52-Week-High-Low-Stock
Image Credited: NSEIndia.com

#2. Sectoral Trick

Sector identification and analysis is necessary to select Stock. Sectoral performance is as important as stock performance. Selected Stock based on the poor performance of the sector may not fetch good returns. Hence, it is important to review the sectors having good momentum.

Steps to Find Out The Active Sectors

  1. Go to www.nseindia.com
  2. Select LIVE MARKET
  3. Under LIVE MARKET, select INDEX.
  4. The Index will show a list of various indices i.e. sectoral indices, strategy indices etc.

Direct URL:

https://nseindia.com/live_market/dynaContent/live_watch/live_index_watch.htm

NSE-India-Index
Image Credited NSEIndia.com
NSE-India-Live-Market-Index-1
Image Credited: NSEIndia.com

It is a very useful technique for the Topic of How to Select Stocks for Intraday Trading?

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#3. Using Market Price Trend

STEPS :

  1. Observe and compare the current market price of NSE and BSE for 5 minutes continuously.
  2. If the CMP (Current Market Price) of
  • NSE > than BSE, Short term trend is up, and prices are expected to rise only till NSE is higher than BSE.
  • NSE  < than BSE, Short term trend is down and prices are expected to fall till NSE is smaller than BSE.
  • NSE = BSE, Short term trend is neutral and the price is expected to fluctuate.

THROUGH THE ABOVE STEPS WE CAN FIND MARKET TRENDS. BASED ON THIS WE CAN SELECT THE STOCKS FOR DAY TRADING.

NOTEIT IS BENEFICIAL TO SELECT STOCK OF REPUTED COMPANIES HAVING HIGH VOLUMES.

It is Beneficial To Select Stock Of Reputed Companies Having High Volumes. It’s a simple way to pick stocks for intraday trading.

Example:

Moneycontrol-Image-300x135
Image Credited: MoneyControl.com

The above image(screenshot from Moneycontrol application) shows trading prices of NSE higher than BSE. It indicates a very short trend or day trend to be still up, and stock is expected to rise. One can buy the stock at suitable entry levels.

Moneycontrol-Image-2
Image Credited: MoneyControl.com

The above image (screenshot from Moneycontrol application) shows trading prices of NSE lower than BSE. It indicates a very short trend or intraday trend to be down, and stock is expected to fall. One can sell the stock at suitable entry levels.

Also Like: Best Tips to Earn Easily 5000 in Intraday Trading

Moneycontro-Image-3
Image Credited MoneyControl.com

The above image (screenshot from Moneycontrol application) shows trading prices of NSE  and BSE neutral. It indicates a very short trend or day tends to be neutral, and stock is expected to fluctuate in the very short term.

#4. Without Chart Trick

  • Using this strategy, you can get a chance to earn a profit if you find a particular stock having an upside trend and has continuously risen 15-20% in the last 3-5 sessions. Such stocks can be easily found on various sites such as moneycontrolMoneycontrol, and NSEIndiaNSE India.
  • Such strong upside trends are followed by a sharp PULL BACK of 3-10% in a single day because of profit booking.
  • To get the advantage of profit booking, one needs to identify and confirm the pullback.

Following Steps Will Help and Confirm The Pullback

  1. Preferred stocks as above instructed. Watch its price moment and note the opening price and closing price.
  2. If the stock is trading below its opening price around 9:30 AM then sell stock near its opening price with the stop loss of the particular day’s high.
  3. Previous Day’s high should be noted as after reaching that point, the prices will quickly fall.

The opposite strategy, i.e. pullback after a strong downward move (15%-20% down in last 3-5 sessions). However, this opposite strategy is less accurate.

Example:

Suppose “Infosys” rise from 900-1100 in the last 3-5 sessions and today opened at 1090, given a high 1120 and now trading at 1080-1089 around 9:30 AM, previous day’s close was 1075. There is an excellent opportunity to sell the stock around 1090(near opening price) with a strict stop loss above 1120(above day’s high).

Get a good profit. If the stock breaks and holds below 1075, there may be a quicker fall.

#5. Gap up or Down Strategy

A gap up generally is a break between prices in the chart that occurs due to sharp up or down movement of prices with no trading in between. Such a gap up-down can mainly create two opportunities:- Buy & Sell.

Buying Opportunities:

Buying opportunity is generated when the stock opens by a margin gap up of 1%-2% of the previous close and touches the previous day’s close after the gap up opening but then bounces back and again breaks the day’s opening price with a stop loss set at day’s low.

Example:

BATA INDIA LTD

The previous day’s close: 400 Today’s open price: 408

Previous day high: 405           Today low price: 401

There is a gap up opening at 408, giving a low of 401 (between the previous day’s high and close) but now bounced back and trading again above 409 for 5-10 minutes. Here one can buy  BATA INDIA LTD around 408-409(above its day’s open price) with the stop loss of  403(below the previous day’s high) for targets of 410.

Selling Opportunity:

A selling opportunity is generated when the stock opens by a gap up of 5-10% of the previous close and breaks below its opening price with the day’s high as stop loss and target of the previous day’s high and previous day’s close.

Example:

BATA INDIA LTD

The previous day’s close: 400 Today’s open price: 420

Previous day high: 405           Today high Price: 425

There is a gap up opening at 420, giving high of 425 and now trading at 415 (below its day’s open price) for 5-10 minutes. Here one can sell BATA INDIA LTD at around  420(near its open price) with the stop loss of 426 for targets of 406-400(near the previous day’s high and close).

There are many other techniques that are based on technical parameters such are MACD, RSI, Bollinger Band, Finding Retracement Level, Support and Resistance, etc. 

It is a very useful technique for the Topic of How to Select Stocks for Intraday Trading?

More Read: INTRODUCTION TO GAP TRADING


Simple Rules to Choose Stocks In Intraday Trading:

1. Learn More About Day Trading Exchanging Stocks:

Determination of stocks for day trading is one of the basic pieces of earning sound of profit in intraday trading. There are only a few normal criteria that any of the greatest day exchanging stocks should have. When you are going to select a stock, it is important for you to get depth analysis and information about the greatest intraday exchanging stocks.

2. How To Select Stocks For Day Trading: Active Stocks

Always prefer active and high-volume stocks, if you want to keep losses at a minimum level. Keeping losses low and profits high is really a highly challenging task for new traders and highly experienced traders. If you really want to keep it then always try to choose active and high-volume stocks before starting trading. Its the best way how to select stocks for day trading.

3, Exchange Only 2 or 3 Scripts:

When you are going to put your resources in stocks, it is reasonable to enhance your portfolio. With regards to day trading exchange your scripts just two or three at once. This way of trading is a smart choice for experienced as well as new traders in day trading. The simplest method for how to select stocks for day trading.

4. Choose Exceedingly Fluid Shares:

For the experienced investors, it is important that they should square their positions towards the end of exchanging session. The way of trading clearly shows that you are fairly trading on a high scale, file-based stocks that are extremely fluid and get exchanged in extensive volumes without fail. Best answer of learning how to select stocks for day trading.

Trading Fuel is the right place for you to learn a lot of things about the strategy and technique to trade well in intraday trading. It is a pioneer in offering online live stock market trading courses to know how to select stocks for day trading in NSE-India through using technical analysis of the live chart.

This reliable share market training center provides proper guidance to be very smart and careful in selecting the best stocks for intraday trading. There are lots of things and techniques you need to utilize when you are going to select stocks for day trading.

FAQs

If you follow the 52-week high and 52-week low of stocks, the price-based trick is suitable for you. When the price touches any of the 52 week levels, it is expected that it will new 52-week high or low soon based on its trend.
In the stock market, there is a constant sectoral change regarding where the money would flow. By following the sectoral tricks you can trade in sectors that have good momentum.
Apart from intraday trading, you can take a delivery approach for the short term. Taking stocks on delivery means taking the position in stock for few days until your target price is reached.
Illiquid stocks are risky for trading. There are not many buyers or sellers in stocks with lower volumes. Therefore, you may not find the right price to enter or exit a stock with lower volumes.
Stop loss helps in managing risks and lowering your loss. With no stop loss in place, you expose your capital to higher loss. Therefore, intraday trades must be taken with a stop loss in place.

Disclaimer: The above blog is for educational purposes. These techniques should be properly studied and then applied. We are not responsible for any Loss suffered using these techniques. We hope that you like our blog on “How to Select Stocks for Intraday Trading?”

Trading Fuel provides various free blogs to help an individual to obtain the proper and right knowledge on trading.

Intraday trading is a specific trading technique where investors and traders buy or sell a financial instrument multiple times in a day. The exchanging in intraday trading conveys more hazards rather than putting other resources into stocks and shares. There are lots of risks involved if you get fail in choosing stocks for day trading. So when you are going to choose any stock, you need to be very choosy and affirmative.

Author

Prashant Raut is a successful professional stock market trader. He is an expert in understanding and analyzing technical charts. With his 8 years of experience and expertise, he delivers webinars on stock market concepts. He also bags the ‘Golden Book of World Record’ for having the highest number of people attending his webinar on share trading.

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