When putting together an investment portfolio, you can use a few different trading strategies. You can buy and hold for the long term or opt for a short-term strategy to make money quickly. For those interested in the latter, day trading can be an appealing option.
Day trading involves buying and selling stocks within a single trading day. There are two different ways to approach day trading: volume and volatility. With a volume strategy, you’ll look for stocks with a very high number of trades daily, which moves the price consistently. Volatile stocks move relatively large amounts in a very short period of time so that they can generate significant returns very quickly.
Both strategies can be pretty lucrative if you time your purchases right. You’ll need to screen for high-volume stocks that trade over 1 million daily shares. You’ll also need to look for a stock’s beta number, which indicates if a stock is more or less volatile than the broader market.
If you find a stock with a beta that’s more than 1 or less than -1, that means it’s more volatile than the S&P 500. These stocks can be excellent options for day traders.
We’ve rounded up some of the best day trading stocks for investors looking for quick returns.
Best Stocks for Day Trading
Advanced Micro Devices, Inc. (NASDAQ: AMD)
Advanced Micro Devices (AMD), Inc., is a leading semiconductor company that designs computer processors and related technologies for both consumer and enterprise markets.
AMD has carved out a significant presence in the tech industry, competing directly with giants like Intel and NVIDIA. Known for its innovative Ryzen and EPYC processors, as well as its Radeon graphics cards, AMD consistently pushes the boundaries of computing performance.
AMD stock is well-suited for day trading due to its volatility and substantial trading volume. The stock’s beta often reflects its dynamic price movements, offering multiple entry and exit points throughout the day. Day traders closely watch AMD because of its regular product launches and strategic partnerships, which can lead to sharp price movements.
Additionally, the company’s ongoing advancements in technology and significant presence in the gaming and data center markets ensure that there is always market interest.
If you are a day trader, it’s crucial to keep an eye on AMD’s earnings reports and new product announcements, as these events typically drive significant short-term price movements
Etsy, Inc. (NASDAQ: ETSY)
Etsy, Inc., is a global online marketplace focused on handmade, vintage items, and craft supplies. Since its founding in 2005, Etsy has grown to become a favorite among consumers looking for unique, personalized products that can’t be found on traditional e-commerce platforms.
The company’s business model emphasizes creativity and individuality, which has resonated well with a broad consumer base.
Etsy’s stock is attractive to day traders because its volatility is high and daily volume is substantial. The stock often experiences significant price movements driven by trends in e-commerce, changes in consumer behavior, and quarterly earnings reports.
By focusing on unique products and a personalized shopping experience, Etsy has remained in the spotlight, making its stock a frequent target for day traders.
Etsy’s financial performance is bolstered by a large and active user base, which ensures steady transaction revenue. Additionally, the company’s efforts to expand its market reach and improve its platform continually generate buzz in the industry, providing day traders with numerous opportunities to capitalize on short-term price fluctuations.
Walt Disney Co. (NYSE: DIS)
The Walt Disney Company is one of the world’s largest and most diversified entertainment conglomerates. With a vast portfolio that includes theme parks, movies, television networks, and streaming services, Disney has a significant impact on the global entertainment landscape. The company’s ability to create beloved characters and franchises has cemented its place as a cultural icon.
Disney’s stock is highly favored by day traders because of its consistent trading volume and moderate-to-high volatility. Events such as movie releases, theme park developments, and updates on Disney+ subscriptions often cause noticeable stock value movements.
The company’s diverse revenue streams, from box office hits to streaming service growth, provide multiple catalysts for day traders to watch.
The introduction and success of Disney+ has been particularly significant, positioning Disney as a strong competitor in the streaming wars. Keeping an eye on subscriber growth and new content releases can provide valuable insights for day traders looking to capitalize on short-term price changes.
Twilio Inc. (NYSE: TWLO)
Twilio Inc. is a cloud communications platform that allows developers to build, scale, and operate customer engagement within software applications. Twilio’s technology powers a range of services including messaging, voice, and video communication, making it a critical tool for businesses looking to enhance their customer interactions.
Twilio is a prime candidate for day trading due to its substantial daily volume and notable volatility. The company’s stock value is often influenced by trends in cloud computing and enterprise software, as well as quarterly earnings reports and product updates.
Twilio’s innovative solutions and strategic acquisitions have helped it maintain a strong market presence, making its stock a frequent target for short-term traders.
The company’s consistent growth in the cloud communications sector and its expanding customer base provide multiple triggers for price movements. Day traders should monitor Twilio’s financial performance, partnerships, and technological advancements to identify potential investing opportunities.
Best Stocks To Day Trade
Tesla (NYSE: TSLA)
Tesla, Inc., is a leading electric vehicle (EV) manufacturer known for its innovative approach to the automotive industry. Under the leadership of Elon Musk, Tesla has become synonymous with cutting-edge EV technology, autonomous driving, and sustainable energy solutions.
The company’s product lineup includes electric cars, solar energy products, and energy storage solutions.
Tesla is a popular stock among day traders—it has a substantial trading volume and volatility. The stock’s beta reflects significant price swings, making it ideal for short-term investing strategies. News related to product launches, production updates, and Musk’s activities often drives sharp price movements, providing ample opportunities for day traders.
The EV sector is rapidly expanding, and Tesla’s position as a market leader ensures that its stock remains in the spotlight. Day traders should closely monitor Tesla’s financial reports, new product announcements, and industry trends to capitalize on short-term price changes.
Roku, Inc. (NASDAQ: ROKU)
Roku, Inc., is a leading provider of digital streaming devices and services, offering consumers access to a wide range of streaming platforms, including Netflix, Disney+, Hulu, and Amazon Prime Video. Roku’s technology simplifies the streaming experience, making it a popular choice for cord-cutters looking to access their favorite content.
Roku’s stock is well-suited for day trading due to its volatility and large daily volume. The company’s stock value often reacts to trends in the streaming industry, new partnerships, and quarterly earnings reports. As more consumers shift to streaming services, Roku’s presence continues to grow, providing numerous trading opportunities.
Roku’s financial performance and strategic partnerships play a significant role in driving its stock price. A day trader would be wise to keep an eye on the company’s earnings reports, new product launches, and industry developments to identify potential opportunities.
Best Day Trading Stocks Under $5
SNDL Inc. (NASDAQ: SNDL)
SNDL Inc., formerly known as Sundial Growers, is a Canadian cannabis company involved in the production, distribution, and sale of cannabis products. The company operates in the medical and recreational cannabis markets, focusing on premium products and strategic partnerships to drive growth.
SNDL’s stock is a popular choice for day trading due to its low price, high volatility, and substantial volume. The cannabis industry is known for its rapid developments and regulatory changes, which can lead to significant price movements. SNDL’s efforts to expand its market presence and product offerings further contribute to its stock’s volatility.
Day traders should monitor SNDL’s financial performance, regulatory updates, and industry trends to identify potential investing opportunities. The company’s frequent news releases and market activities can create short-term price fluctuations that day traders can capitalize on for quick profits.
Best Penny Stocks for Day Trading
Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE)
Faraday Future Intelligent Electric Inc. is a company focused on developing intelligent electric vehicles (EVs) that incorporate advanced AI and connectivity features. Founded in 2014, Faraday Future aims to revolutionize the automotive industry with its cutting-edge technology and innovative vehicle designs.
FFIE is a compelling stock for day trading due to its significant volatility and high volume. The stock’s movements are often influenced by announcements related to vehicle production, technological advancements, and partnerships within the automotive and tech industries.
As a company positioned at the intersection of AI, clean energy, and IoT, Faraday Future has the potential to experience rapid growth and substantial price swings.
If you want to be a successful day trader you should pay close attention to FFIE’s product launch timelines, strategic partnerships, and industry trends to identify opportunities for short-term gains. The company’s ambitious plans to disrupt the automotive industry make it a stock worth watching for those interested in day trading.
Explore some more great penny stocks for day trading.
Should You Day Trade Stocks?
Day trading involves buying and selling stocks within the same trading day, aiming to capitalize on short-term price movements. This trading strategy requires a deep understanding of market dynamics, quick decision-making, and constant monitoring of stock prices.
It’s a high-risk, high-reward approach that can yield substantial profits but also significant losses.
Day Trading Strategies
There are several strategies that day traders employ to maximize their profits:
- Volume Trading – This strategy focuses on stocks with a high volume profile, ensuring liquidity and the ability to enter and exit positions quickly.
-
Volatility Trading – Investors look for stocks with significant price swings, taking advantage of short-term fluctuations to make quick profits.
-
Momentum Trading – This involves buying stocks that are moving strongly in one direction and selling them when the momentum starts to wane.
-
Range Trading – Investors identify stocks trading within a certain range and buy at the lower end while selling at the upper end.
Tools for Day Trading
To be successful, a day trader needs the right tools:
-
Stock Screeners – These help identify stocks with high volume and volatility.
-
Technical Analysis Tools – Charts, moving averages, and other indicators are crucial for making informed investing decisions.
-
News Feeds – Staying updated with the latest news can help traders react quickly to market-moving events.
Risks and Challenges
Day trading comes with several risks and challenges:
High Probability of Loss
Most traders, especially those new to day trading, face a high probability of losing money. The fast-paced nature of day trading demands precise timing and decision-making, which can be challenging for inexperienced investors.
Without a solid strategy and risk management plan, it’s easy to make mistakes that lead to significant financial losses. Many investors find that their initial ventures result in losses rather than gains, underscoring the importance of preparation and experience.
Stress and Emotional Strain
Constantly monitoring the markets and making quick decisions can be incredibly stressful and emotionally taxing. The pressure to make rapid trades can lead to burnout and emotional fatigue, impacting overall mental health and decision-making abilities.
This stress can be compounded by the financial stakes involved, where every decision has immediate consequences. Managing emotional responses and maintaining a clear, focused mindset is crucial.
Financial Requirements
Successful day trading often requires significant capital to take advantage of small price movements. Without sufficient funds, traders might not be able to manage losses effectively, increasing the risk of substantial financial setbacks.
Having a larger capital base allows traders to better absorb losses and gives them more flexibility in their strategies. However, the need for significant capital can be a barrier for many potential investors, making it difficult to start and sustain.
Tips for Success
Education and Practice
Take the time to learn about day trading strategies and practice with paper trading before using real money. Gaining a solid understanding of market dynamics and honing your skills in a risk-free environment can significantly improve your chances of success.
Utilizing educational resources such as books, online courses, and trading simulators can help build a strong foundation. Continuous practice helps in developing the necessary skills and confidence to execute trades effectively in real-market conditions.
Discipline and Patience
Stick to your investment plan and avoid making impulsive decisions based on emotions. Maintaining a disciplined approach helps manage risks and enhances the likelihood of making profitable trades.
Setting clear goals and adhering to your trading strategy, even during market volatility, is crucial for long-term success. Patience is equally important, as it allows traders to wait for the right opportunities rather than chasing every market movement.
Continuous Learning
The stock market is constantly evolving, so staying informed and adapting your strategies is crucial for long-term success. Regularly updating your knowledge and skills ensures you remain competitive and can effectively navigate market changes.
Engaging with trading communities, following market news, and learning from experienced traders can provide valuable insights. Adapting to new trends and technologies can also open up new trading opportunities and improve overall performance.
Best Stocks to Day Trade: Final Thoughts
Day trading isn’t for everyone, but it can be an effective way to generate strong returns for investors who are willing to take a risk.
The best day trading stocks are ones that see significant price movements as the day goes on.
FAQ: Best Day Trading Stocks
What Are Some Other Investing Strategies Besides Day Trading?
Apart from day trading, there are several other investing strategies that traders use to capitalize on market movements. Swing trading involves holding stocks for several days or weeks to profit from expected price movements, allowing more time to make investing decisions compared to the rapid trades in day trading.
Options trading is another strategy, where traders buy and sell options contracts to leverage stock price movement without owning the underlying assets.
Forex (FX) trading involves trading currencies in the foreign exchange market. The FX market has highly liquid stocks and operates 24/7, providing numerous trading opportunities.
How Can I Find the Right Stocks to Successfully Day Trade?
To find ideal day trading stocks, look for those with volatility that is high and substantial volume. Using stock screeners and technical analysis tools can help choose stocks that show significant price movement and liquidity.
Monitoring pre-market activity can also provide insights into stocks that might be active when the market opens.
What Are Some Risks Associated With Day Trading?
Day trading comes with several risks, including a high probability to lose money. The need to make quick decisions can lead to emotional investing, which often results in financial losses.
Additionally, significant buying power is required to take advantage of small profits from frequent trades, and the constant monitoring can be stressful.
Can I Trade Stocks Outside Regular Market Hours?
Yes, in addition to intraday trading, you can trade stocks during pre-market and after the market closes. Pre-market investing occurs before the market opens and can provide early opportunities based on overnight news or earnings reports.
Is It Possible to Make Consistent Profits With Day Trading?
While it is possible to make consistent profits with day trading, it requires a deep understanding of the market, discipline, and effective strategies—such as chart patterns and technical indicators. Most traders face challenges and may experience losses, but with continuous learning and adapting to trends, achieving consistent profits is attainable.
The key is to stay informed, be patient, and maintain a disciplined approach to investing—sticking to strategies that are proven to be successful.
Tags:
