How to Choose Stocks For Intraday Trading - Angel Broking http://www.angelbroking.

com/intraday-trading/how-to-choose-stocks

To succeed as a day trader, it is important to know how to pick stocks for

intraday trading. Often people are unable to make profits because they

Liquidity is the most important intraday trading

(http://www.angelbroking.com/intraday-trading) tip while choosing the
right stocks to trade during the day. Liquid stocks have huge trading
volumes whereby larger quantities can be purchased and sold without
significantly affecting the price. Generally, lesser liquid stocks do not
provide traders the opportunity to purchase and sell larger quantities due
to lack of too many buyers. Some traders may argue that illiquid stocks
offer bigger opportunities with rapid price modifications. However,
statistics show that volatile stocks show greater movements in a short
period of time. Thus, most of the possible gains dissipate while the
downside risk still looms. Nonetheless, the liquidity of the stocks depends
on the quality of the trades placed by the traders. For example, a volume
of 50,000 to 75,000 shares is sufficient if the trade is for 50 or 100 Rs;
however, if the volume is few hundreds or thousands, volume
requirements significantly become larger.

It is commonly noticed that a low daily volume of traded stocks or those

where some huge news is expected move in an unpredictable way.
Sometimes, the stock may show volatility even after the announcement of
the big news. Traders are recommended to avoid intraday trading in such
stocks. A few volatile stocks are in the mid-size segment while most
stocks traded in the low-cap categories like S, T, and Z are highly chaotic.

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In addition to being volatile, these stocks have low daily volumes, making
them illiquid.

An intraday tip for choosing the right stock is to opt for those that have a
higher correlation with major sectors and indices. This means when the
index or the sector sees an upward movement, the stock price also
increases. Stocks that move according to the sentiment of the group are
reliable and often follow the expected movement of the sector. For
example, strengthening of the Indian Rupee against the Dollar will
generally affect all information technology companies dependent on the
US markets. A stronger rupee implies lower earnings for the IT
companies and weakening rupee will result in higher export incomes for

remember that moving with the trend is always beneficial. During a bull

are likely to decline is advisable.

Undertaking quality research is one of the most vital intraday tips that
traders must always remember. Unfortunately, most day traders avoid
doing their research. Identifying the index and then finding sectors that
are of interest is recommended. The next step is to create a list of several
stocks with these sectors. Traders need not necessarily include sector
leaders, but rather identify stocks that are liquid. Technical analysis and
determining the support and resistance levels along with studying the
fundamentals of these stocks will help traders find the right stocks to
profit through intraday / day trading (http://www.angelbroking.com
/intraday-trading).

Intraday trading has inherent risks; but speed plays a vital role in making
all the difference. Earning profits through small price fluctuations during
the few trading hours is not an easy task. Angel Broking Angel Eye helps
to monitors stocks in real-time. Being browser-based, you can easily do
online share trading from anywhere, without the speed being affected.
The platforms helps in taking Quick decisions, thus enabling traders to
book profits..

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