5 Tips for Choosing Stocks for Daily Trading

Daily stock trading is a stock trading activity which is carried out in the short term, namely a matter of days. To get the right guarantee, you must first analyze which stocks are for daily trading.

Therefore, this article will discuss further about daily stock trading. Come on, let's look at the discussion on stock trading, especially tips on choosing trading stocks that are suitable for beginners.

#1. Focus on Stocks that Have High Liquidity

The first step you need to take is to focus on stocks that have high liquidity. Liquidity is a term used to describe whether or not an asset sale and purchase transaction is on the capital market.

It can be said that when stock liquidity increases, it will be easier for traders to buy or sell it at the desired price. Thus the trader is able to get the maximum profit.

#2. Observing Price Changes

Traders can benefit from changes in asset prices that occur in the short term. Thus, this aspect of changing volatility is an aspect that traders need to pay attention to.

This high price volatility can also lead to high risk. This is what makes a trader must be more careful when choosing stocks that have high volatility every day or hour.

For day traders, you can use indicators such as candlesticks which can observe price changes as well as the volume and frequency of transactions on an asset.

#3. Choose Stocks with Easy-to-Analyze Charts

Furthermore, you also need to choose charts that are easy to analyze for daily stock trading. Technical analysis can indeed be used by all assets, but it turns out that there are also assets that are difficult to read.

So that you can still make a profit, as a daily stock trader you can avoid stocks that are difficult to analyze. To carry out trading activities, technical analysis is indeed the most credible way that can be done.

#4. Choose Stocks with Good Sentiment

As a day trader, you can choose stocks with good sentiment. With good sentiment, traders and investors will be encouraged to buy shares so they can raise the price.

On the other hand, if sentiment is bad, it can cause investors and traders to sell it. For day traders, the sentiment that needs to be considered is the sentiment that can affect the daily stock price.

#5. Comparing Preferred Stocks with Indices

Tips for choosing suitable stocks for daily trading are comparing stocks that have been previously selected with the JCI (Composite Stock Price Index), which is representative of the stock industry.

It is true that many traders prefer to trade stocks that have a medium to strong correlation with certain indices. Stocks that have a strong correlation with the index will tend to rise 2% if the related index rises 1%.