At times, informed and sophisticated investors are the drivers of volatility in the stock market. Do this once to find a handful of volatile stocks you can day trade throughout the week. The whole process takes about 20 minutes, and your homework is done for the week. No more researching for volatile day trading stocks every day, such as flipping through new highs and lows or a biggest movers list.
You can use a news service like Benzinga Pro and Hammerstone Markets to research the price change catalyst. If you want to invest in the stock market, you have to learn how to trade stocks and consider the risk. Informed investors can use volatility to make money irrespective of the direction of price movement. And sophisticated investors understand how volatility affects a portfolio.
Example Of Day Trading Stock
Advanced Micro’s stock is extremely liquid and has a daily volume that exceeds 85.4 million shares. Its volatile stocks for day trading monthly volatility is roughly 4.6%, meaning it has plenty of movement for a promising day trade.
Use the screener tool to further filter results for market capitalization, performance and volume. Narrowing the search in this fashion provides traders with a list of stocks matching their exact specifications. Some of the best 5G stocks belong to the most volatile stocks. The long-term investor prefers a stable and predictable market with low volatility and sustaining growth, while day traders aim to get into a trade volatile stocks for day trading when volatility is high. If a stock opens 20 percent down and stays there, it doesn’t provide an opportunity for trade. But if a stock opens down 20% and then moves 10% in one direction or the other, that might be a good trading opportunity. Earnings often cause high percentage price movements of most volatile stocks, while merges and acquisitions headlines typically cause huge gaps but no further volatility.
Monitoring Intraday Volatility
By watching a handful of these stocks you always have big moves to day trade…especially in the mornings, which is when day traders should be most active anyway. Look for stocks that were volatile during the prior trading session or had the biggest percentage gains volatile stocks for day trading or losses. Add in a volume filter to make sure the stocks are suitable for day trading—day traders generally look for stocks that have at least 1 million shares traded daily. You can use screeners in different ways to find stocks that fit your trading needs.
Volatility is another important consideration for choosing good day trade stocks. Since day traders tend to profit from movements in price, the security must have medium to high volatility. A stable and low volatility stock could be a good long-term investment but it doesn’t offer much for day traders. Its volume and volatility have remained stable and consistent since 2014. Bill Barrett has a daily average volume of 2.5 million shares for both the short- and long-term analyses.
Day Trading Tools
Have a plan for how you will trade them, and test out your strategy before live trading. This isn’t an endorsement of these stocks, as the stocks on the list will change weekly. This method is just one option for finding volatile stocks for day trading, if you don’t want to be constantly researching.
Typically, this type of trading will take about minutes per day. In this time, you will either earn a huge profit or take a tremendous loss. This is why a lot of people will tell you not to trade in volatile stocks because of the risk. Always look for liquid stocks that easily traded so you can sell fast. You should avoid penny stocks because you might not find a buyer even when you are suppose to make a profit from penny stock gains.
How Traders Can Take Advantage Of Volatile Markets
Consumers shop Etsy for the distinct products it offers that can’t be found at larger companies such as Wal-Mart. Etsy meets all the criteria needed to qualify as one of the best day trading stocks. It trades roughly 3 million shares per session, and its monthly volatility is near 4.6%. As far as price movement goes, Etsy is doing great, with share prices trending upward both monthly and yearly at over 14% and 42%, respectively. Make a list of all the stocks you’re interested in trading, and stay informed about what’s going on with those companies as well as the market in general.
- Small-cap stocks and penny stocks might have wild swings one day and no movement for days.
- Ideally, it’s only suited for highly seasoned and experienced traders.
- It’s better to have some investment experience before you try day trading.
- Also, it’s ideal to go for highly liquid stocks with decent volatility.
Its volatility ranges from a low of 4% to a high of 10% with an average of 7.29% over a 100-day period. ZIOPHARM Oncology Inc. has a volume of about 3.9 million shares per day over 100 days. Its range over the past 100 days value investing is 6.9%, and it has seen a daily price movement of more than 4% between May and July. Day traders looking for shortable stock might struggle to borrow ZIOPHARM’s stock on some days, but it is possible if you time it well.
Day Trading Stock Tips
Many investors are keeping their eye on Advanced Micro due to its recent agreement with Google regarding the creation of hardware for Google’s new gaming platform, Stadia. Advanced Micro’s stock is sure to move when the new platform releases, so day traders should keep a close eye on the headlines. Etsy is a popular e-commerce retailer that provides smaller vendors with a platform to sell their unique, custom products.