Finding Stocks for Day Trading

Are there certain stocks for day trading that are better than others?

It's a natural question for day traders to ask. Afterall, of the thousands of stocks traded each day, how do you know where to begin?

The problem with the question is that it puts the cart before the horse. I can show you how and where to find stocks for day trading, but the first task is to know the criteria you are going to use for determining day trading stock picks. The task of finding good day trading stock picks begins with your strategy.

Let me use a real example. One of my key strategies is trading the morning gap. (A gap occurs when the opening price is significantly higher or lower than the previous day's closing price.) In trading these gaps, I discovered that lower priced stocks with adequate trading volume proved to be the most desirable stocks for day trading this gap system. By research and experience, I narrowed my choices to stocks priced between $5 and $50, trading at least 250,000 shares per day, and gapping (up or down) by at least 3%.

Now, just because these qualified as my day trading stock picks does not mean that I traded each one. But, setting up a system, a criteria for selecting certain stocks, was the first thing I had to do.

I did not want stocks that were too cheap (i.e. penny stocks) or had too little volume. This guaranteed a certain amount of volatility. As a day trader, I don't want thinly traded stocks that take forever to move in price. So, my day trading stock picks evolved as I continued my research.

There are various sources for scanning stocks. The one I've used for years now is This software will allow you to scan the market for a variety of strategies. So, you can choose my gapdownprofits strategy (see the link in the footer below), or create your own. Trade-ideas will quickly sort the market with more combinations than you can currently imagine.

You can also access trade-ideas (TM) through QuoteTracker. This service allows you to use your current broker's account as a qualifier for using the trade-ideas scan, if your broker is listed with Quotetracker. So, I'd say to check out both sources. I'm sure there are other very sophisticated scanners to help you scan stocks for day trading. Just find the one that's most comfortable (and affordable) for you, and give it a trial.

I'll mention one other method for finding stocks for day trading. As you look at a variety of stocks and charts, choose 3 or 4 stocks that make nice rolling patterns. I know the temptation is to try and trade dozens of stocks every day. But, especially in the beginning, if you will concentrate on just a few companies with rolling, recognizable patterns, learning to use the technical indicators I teach for determining entry and exit points, then you can make great progress as a day trader.

In fact, I know some swing traders who continue to focus on just a couple of companies. When you do this, you begin to get a feel for how a stock trades, the ebb and flow of the movement in price. Compare this movement with the overall market, and you can learn a great deal about how to trade stocks.

But, the main point of this article is to emphasize one important point: your stocks for day trading will be determined by your day trading strategy. Your strategy determines your day trading stock picks.

If you want to know more about stocks for day trading and day trading basics, then click here.

If you want to know more about day trading strategies, then click here.