How to Pick Stocks for Intraday Trading?

Due to the fact that more and more modern investors like to make money quickly rather than gradually, intraday trading has recently been fairly popular. And while intraday trading can appear lucrative within minutes or hours, there are significant dangers involved, and making the wrong decision can result in no profit or even a loss. As a result, choosing the most ideal stock and having the best information becomes quite important.

The article that follows offers you the appropriate guidance on how to choose stocks for intraday trading.

But you can’t skip the fundamentals, so let’s have a look – 

What is Intraday Trading?

  • “Intra” means “within,” an intraday action is one that is completed within a day. Therefore, intraday trading refers to the process of purchasing a stock with the intention of selling it for a profit within a few minutes or hours.
  • When a trader anticipates a stock will increase, he purchases it at a discount and sells it at a premium. Similar to this, he sells at a high and then buys at a low when he anticipates a stock decline, earning a profit on the difference.
  • A very keen and in-depth understanding of the market, patterns, and trends is necessary for intraday trading.
  • The most fundamental guideline for intraday trading is to sell off all holdings at the end of the market time, regardless of profits or losses, in order to exit the market position before the market shuts.

Things to keep in mind 

Before you learn to select a stock, it is essential to keep a few things in mind, take a look at them below – 

  • Stop Loss

When trading, know your stop loss amount. This implies that the stock is automatically sold to stop any additional losses in the event that your pattern doesn’t work and your stock touches the amount that you fixed. Stop loss functions as an advance order to sell in an exit strategy.

  • Less is more 

Don’t buy more stocks than necessary when you first start trading. This business may be problematic. There will be some errors made, and having a smaller investment and fewer stocks will enable you to more easily absorb any losses and enhance your learning. Gradually your confidence will build and you can have more stocks and higher investments.

  • Keep Calm and Learn 

It is crucial to maintain composure when making one’s first investment in order to reap greater rewards or suffer fewer setbacks. Market fluctuations and volatility will make people anxious. Making rational decisions while being composed is crucial.

  • Stay away from Penny Stocks 

Any amateur trader does not want to add to the risks of intraday trading by selecting a penny stock. Although penny stocks provide great profits, they also carry significant concerns.

How to select a stock?

Follow these processes for selecting the stock for Intraday Trading

Do your homework

While intraday trading does entail entering and leaving the market on the same day, it does not entail choosing your stocks at the same time. So, b egin your task a day in advance. To have a better understanding, monitor the daily charts for the stocks you are interested in and consider their patterns using candlestick charts. Make your choices based on these observations. As a novice, it could take you some time to identify and make a decision, but practice and consistency is the key.


It is crucial that the stock is liquid in order to be able to exit the market before the market closes. The stock ought to be in high demand on the market, and selling it whenever you want shouldn’t be tough. When you want to sell, the trading volumes of these stocks should be high, indicating that there are many individuals trading in this stock.

Follow Top-Down approach 

Choosing the sector you believe performs well should be your first step when choosing a stock for trading. You should only start looking for the stock you want to trade in after choosing the sector. Making a choice is easier when a sector is chosen first because there are fewer stocks from which to choose. This will increase the likelihood of making better selections.

Volatile Stocks

It is usually advised to avoid volatile stocks. Intraday trading is a perfect time when they are your friends. A volatile stock offers more opportunities to enter into a favourable trade. The decision-making is vital in this situation because these stocks can plainly result in losses if the choice is made incorrectly and the stock experiences a sharp decline.

Observe Market Trends 

The movements of the market greatly influence the movements of the stocks. They are either positively or negatively correlated with market movements. Some stocks may increase by two units if the market increases by one, or vice versa, or they may have a negative relationship with other values.

Trading Tools 

It takes rigorous investigation and evaluation to conduct intraday trading. Such research calls for charting tools that can help with the identification of support levels, chart patterns, and day trading chart patterns. The need for these instruments becomes crucial. These tools for qualitative research are offered by many brokers.

Clean Companies

It is crucial that the company in which you acquire stock has all disclosures clear and steady management, whether you are purchasing it for a day, month, or year. However, it is also possible that such equities would decline and cause losses when trading intraday. Hence, a company with transparency is best to look for. 

News Sensitivity 

Stocks respond in a specific way when they are sensitive to a particular type of media news. In response to a specific kind of news, they might increase or decrease. You might trade in a stock in accordance with how it reacts to a specific type of news once you are well acquainted of it. However, it’s important to keep in mind that these reactions might occasionally move in the opposite direction.


Intraday trading is undoubtedly risky, thus anyone with a poor tolerance for risk should avoid it. But after learning, you can earn desirable profits. L  learning to trade needs time, patience, and a few mistakes as well; it cannot be learned in a single day. The most important stage is picking the right stock on the right day, which is followed by picking the proper broker. A quick-thinking broker with the necessary tools. The aforementioned information will serve as a guide for the reader, but with time and experience, one also develops their own method for selecting the stocks that will function best in light of their goals and requirements.

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