How to Consistently Pick Successful Stocks to Day Trade
One of the biggest questions I get from new and experienced traders is, “how do you know what stocks to trade?”
Picking the right stock is overwhelming! What indicators do you go off of? How do you know if now is the right time for trading the stock? There are so many to look at and review that it’s enough to make you want to stop before you even start.
I’m about to let you in on the winning strategy that has been successful for me and continues to bring me major gains week after week.
These stocks are easier to find than you realize.
The first thing to do when looking for a stock to trade is to develop a good scanning and filtering system.
Developing a good scanning and filtering system is a three-step process for me. I try to break things down to be as simple as possible to keep them from being overwhelming.
Step 1 — Create a master watchlist of 50–100 stocks
To make picking a stock less overwhelming for yourself, it’s better to narrow your choices from thousands of tickers to 50–100. When picking these stocks, you want to keep them between $15 — $200.
This is the sweet spot that will give you the best bang for your buck. By that, I mean this is the area that will give you the highest profit offerings throughout the day.
Doing this will ensure the stocks usually meets the following criteria:
- It needs to be moving 3%-5% in intraday swings.
- This will allow you to get at least 1%-2% because it’s rare to catch the entire swing.
- The stock needs to have at least 500,000 in average daily volume.
- Go to the 180d 4hr chart and look at two intraday volume candles
- They need to add up to 500,000–1,000,000 to make sure your spread will be minimal and it will be easy to buy/sell.
After that, you want to watch your picks daily and weekly
Step 2 — Study your watchlist daily and weekly
The best way to succeed is to always be aware of what’s going on. Every Sunday you need to pick 10–20 stocks to focus on each week from your master list.
Every day you will evaluate your stocks:
- Sort with the highest gainers on top. Look for 5%-50% movement per day or 5%-10% gain. These are called momentum stocks.
- Look for morning momentum before the market opens. This will look like a very large fat green first candle.
- To enter the trade, you will want to buy midway through momentum after you have confirmed the trade. Then catch the second half of momentum.
Don’t forget to go over your watchlist and update your stock picks
Step 3 — Go over your watchlist weekly or monthly to update your stocks
To set yourself up for consistent success, you need to actively manage your master watchlist. You’ll find that sectors and stocks run in cycles. Make sure you are strategically updating your watchlist to go with the sectors and stocks that are trending and moving the most.
The best way to track this is to keep an Excel spreadsheet of each watchlist you create and watch for patterns
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In conclusion…
Finding the perfect stock to trade can be difficult to do. That’s why having an updated watchlist you can study meticulously will help you out so much.
This is not information I would usually give out for free, but using this approach has helped me to escalate my account. No more worrying about what to trade when you recognize trends in the stocks and sectors!
To be able to pick your daily trades, you need to:
- Create a master watchlist of 50–100 stocks
- Study your watchlist daily and weekly
- Actively manage and update your watchlist
Remember that just because a stock is skyrocketing at the moment does not mean it is a good trade to get into. That is called FOMO and it will hurt your account more often than it will help it! Slow and steady wins the race when it comes to being a successful day trader. That includes practicing creating your master watchlist to find your perfect stocks to trade.
