Finding the best day trading stocks is not that hard if you know how and where to look. Often it’s a matter of just nailing down a solid strategy. When day traders get strategy right, they score big; when they get strategy wrong, they suffer miserably. This is case more often than not so it just makes sense to get the right strategy in place from the start. That being said, here’s a three-pronged strategy which can help any struggling or aspiring day trader navigate the business of executing winning trades.
Best Day Trading Stocks – Trading On News
The best day trading stocks have an element of currency and relevance to them. Both these elements are frequently embodied well in breaking news. The news surrounding a stock can be for any number of reasons. There could be a new product, appointment of a new CEO, a significant development in the company’s sector or industry, or even a major development in the general economy. Any one or a combination of these factors can bring a stock into play; when this happens, such stocks, depending on the nature of the news, can see huge demand as well as strong coverage from analysts.
Trading the best day trading stocks on news means that you are likely to enjoy one of the essentials of entering and exiting a position: volume. This brings us to the second element of the three-pronged strategy.
Best Day Trading Stocks – Premarket Volume
Most news surrounding a stock often come at, or near the market open; this means that news can sometimes be a tricky catalyst for entering a stock. But premarket volume is a different story. Busy activity in the premarket hours often means that there is some buzz – possibly a carry-over from earlier after-market trading – which is carrying the stock on the day. This buzz can often send traders rushing to gobble up huge trunks of a stock and so can give some indication on whether a stock is ripe for day trading on the day. Some day traders will go with a premarket volume of 50K to determine buzz, but a safer threshold is anything above 100K. Above the 100K mark and you are onto an opportunity that is smoking. But there is one more element in the strategy that deserves careful mention.
Best Day Trading Stocks – The Importance of the Public Float
The public float is the number of shares that are available to the public for buying in any given stock. There is no set standard as to the size of such floats; but it is generally accepted that the lower the float, the more attractive the stock. This is so because a low float stock can generate a demand frenzy that pushes the price of the stock higher. It’s the old supply vs demand paradigm; and as you know, when demand exceeds supply, price tends to rise. Low float stocks therefore offer a solid opportunity when it comes to identifying the best day trading stocks to buy.
Of course, you can always augment this three-pronged strategy by running it alongside a credible stock-picking service. The best services will be free, transparent, and deliver a consistent diet of regular picks. If you’re already signed up to a service then fine, you can begin augmenting with the strategy outlined above; if not, you can begin augmenting right away by signing up with this free service.