Stock selection is one of the most critical aspects of intraday trading.
You must be highly selective in this procedure, as picking any random stock may result in significant losses and persistent capital erosion. As a result, it’s critical to adopt and stick to one solid method.
My bespoke scanners help me locate stocks to trade and present me with the best entry points. I prefer to trade futures and options. I only trade non-F & O stocks on rare occasions.
- I favour stocks that come with well-defined setups in my scanners, and one may create their own circumstances and obtain stocks for trading.
- There are two big elements to it here.
- EOD (end of the day) stock selection for the following day
In my EOD strategy, I analyse the price movement of the previous 2-3 days to get a sense of what purchasers are doing, then rank my stocks and select 4-5 stocks for buying and selling the next day. I start my transactions by looking at the major market trends.
I love to choose my stocks a day ahead of time since it gives me confidence. Although I cannot divulge my whole method of selecting here, I do want to offer one of my intraday trading selection factors.
There are three things you must have before you begin day trading with real money:
HOLD STRONG ON PRICE ACTION
A PROFITABLE STRATEGY THAT HAS BEEN BACK-TESTED
TO CONTROL LOSSES, A STRONG RISK MANAGEMENT SYSTEM IS REQUIRED.
I usually prefer to trade my pre-selected stocks in the following trading session, but I don’t always get excellent setups to enter, and sometimes large gaps make trading tough. I only use this strategy as a last option or avoid trading altogether.
Stocks are chosen in real-time markets under various criteria.
Let’s talk about the selection process now.
I only trade stocks with a high level of volume liquidity. (Make sure the highlighted box has a value.)
I use volume with good momentum stocks (percent change) to avoid becoming stuck with them for an extended period of time. As you spend more time in a relationship,
We acquire all opening tick prices for indexes and equities because market preopen operations begin at 9:00 a.m. and end at 9:08 a.m.
Begin paying attention to the top stocks, both gainers and losers, that open with the largest percent move.If more than two stocks in that list belong to the same sector, keep that sector on your radar as well.
When the market starts, keep an eye on which sectors are driving the nifty up or down in the first 15 minutes.
One additional thing you can follow in these stocks is future open interest activity. If you’ve ever wondered why some stocks move really quickly and become very trending during the day, it’s because they have the largest OI built-up, which you can track here.
When you observe other stocks in this highlighted box that have extraordinary open interest build-up, these are the counters that are rapidly moving in comparison to others, and display visible outcomes because most active and clever traders are interested in such stocks.
After the Bank Nifty, we have Cummins India, which has the largest open interest and good volume. It’s an incredible run that lasts the entire day.
Consider the following example:
If you look at my trades from November 10th, you’ll notice that I traded Kotakbank. I started following markets and saw that banks were the top gainers, indicating that a large amount of money was moving at the time and pushing the index higher. When the broader market is falling, you can apply the same strategy to pick selling stocks.
Now comes the hard part: figuring out which banking stocks are moving the most and, based on your entry strategies, determining where you can enter with a defined and as tiny a stop loss as feasible.
Always adhere to your stop-loss orders, and whether you purchase or sell, do it with caution.