Tuesday, May 31, 2011

Stocks in Play

I cam accross this term in the blog written by SMB capital (an American day trading firm). It is important to select appropriate stocks for day trading. AS the blog says "you are only as good as the stocks that you trade. You can be the best trader in the world, but if your stocks do not move, nor are liquid, then you cannot make money consistently"

The stocks that move intarday are the stocks that are in play. I have modified the ideas in the blog to suit Indian markets.
What is a Stock In Play? This could be, in no particular order:

A stock with fresh news
A stock that is likely to open with a gap up or down
A stock that does more than ten million shares of volume
A stock that has a travel range (total of intraday swings) of more than  3 percent every day.
A stock that is close to important levels, which we can trade off.

Apart from the Nifty and Bank Nifty which continue to be "in play" every day because they are indices, selction of stocks for day trading needs careful thought.


shabsaif said...

Its difficult to find stock that has trade range 3 percent everyday, because after volatile movement every stock has to go in consolidation period. So its important to change stock frequently.

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