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Day Trading Stocks – Know Few Useful Facts
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Posted On :
Sep-14-2010
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Article Word Count :
465
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Finding few good stocks for day trading is not difficult with more than 50,000 stocks listed in the US Stock Markets itself. The most important rule to remember is that you are not an investor but a trader. Therefore, there is no need to think long term. Keeping this fact at the back of your mind, you should keep your eyes open on the intraday price movements of your chosen stocks.
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It may be well known to the persons already in stock trading market that inday trading stocks , one need to learn two very important skills. The first and the easy one is doing the right stock picking and this can be treated as well begun is half done. The second is also important and of course the difficult one. How to trade these stocks? What I mean by how to trade these stocks is the right entry and the right exit. Without this, you will never succeed at your day trading strategy or plan.
Finding few good stocks for day trading is not difficult with more than 50,000 stocks listed in the US Stock Markets itself. The most important rule to remember is that you are not an investor but a trader. Therefore, there is no need to think long term. Keeping this fact at the back of your mind, you should keep your eyes open on the intraday price movements of your chosen stocks.
There are few rules that are associated with stock trading market and one should follow when doing the stock picking. These rules have been developed by different successful day traders with vast experience in this area. The very first rule that narrows down the universe of stocks that you can choose says that only choose those stocks that have a daily average volume of one million shares or more. What this means is that the stock is having an average daily volume of around one million stocks daily for the last many weeks and months rather than having this trading volume for one odd day.
It is very much recommended to make this your cardinal principle in day trading stocks. Do not go for high priced stocks with low volume at all cost. In the same vein, do not go for low priced stocks with high volume also.
Once you have narrowed down the universe of stocks that you can choose for doing day trading; now you need to narrow it down further with one more rule. This rule says that choose stocks that are trading between $10 and $100 per share. Now, a price below $10 just, means that the stock is not well known and there might be some problems with the agency or the company. However, a price of above $10 per share gives an indication that the company has good health and the stock is not having severe liquidity problems. You see, liquidity in the stock that you choose is very important. To ensure, liquidity you chose only those stocks that were trading on average with a volume of one million shares.
So, enjoy on line stock trading now and get help from trading tools and websites available online for free.
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Article Source :
http://www.articleseen.com/Article_Day Trading Stocks – Know Few Useful Facts_32977.aspx
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Author Resource :
Stock Investing/trading - learn how to invest in the on line stock trading and get free investing ebook, day trading stocks tips, stock market strategies, and stock trading articles.
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Keywords :
day trading stocks, Stock Investing, Online Stock Trading,
Category :
Finance
:
Investing
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