Searching for Regularly Volatile Stocks
To search for stocks that experience high volatility regularly and large trading volumes, go to StockFetcher or any other screener of your choice. If you are on StockFetcher, click on “New Filter” and copy and paste the following lines into the light yellow area:
Show stocks where the average day range (50) is above 5%
and price is between $10 and $100
and average volume (30) is greater than 4000000
add column average volume (30)
add column average day range (50)
Once you have entered each line, click on “Fetch Stocks!” to get the results. You can see the first five results for free. The results will also be delayed by a day. To see more results and access data from the most recent trading day, you will need to pay for a subscription.
These criteria will generate a list of stocks that:
Typically move more than 5% in a day, based on a 50-day average; you can use any time frame you want, but a 50-day average or longer will help you find stocks that have moved significantly and regularly over an extended period.
Are priced between $10 and $100; you can adjust those numbers to your preferences.
Have an average daily trading volume greater than 4 million over the past 30 days.
Are individual stocks, not leveraged exchange-traded funds.
The “add column” commands allow you to see stocks with the largest average trading ranges and volumes.
Run this search on the stock screener every weekend. Pick two or three stocks from the list and trade them for the week. Repeat the process and track your successes and failures. You can customize many aspects of your search, so tweak any of the criteria as needed to get a list of stocks that better fit your day trading strategy or specifications.
Daily Stock Analysis
Another method is to monitor stocks that are likely to move significantly each day. You can do this using a stock screener or by paying attention to news events such as earnings reports.
Searching for Daily Opportunities Using a Stock Screener
Look for stocks that were volatile during the previous trading session or that had the largest percentage increases or decreases. Add a filter for trading volume to ensure that the stocks are suitable for day trading; day traders typically look for stocks that trade at least a million shares daily.
For example, you can easily set up this search on FINVIZ, which is another free screener. Click on the “Screener” tab. Select “Most Volatile” or “Top Gainers” or “Top Losers” from the “Signal” dropdown menu. The filter options should display automatically, but if they don’t appear, click the arrow next to “Filters.” Then you can set the “Average Volume” filter to over a million (more than 1 million). If you want to exclude leveraged exchange-traded funds, you can specify that in the “Industry” filter (“Stocks only (ex-Funds)”).
Earnings Calendar Offers Daily Trading Opportunities
In addition to using a stock screener, you may also want to check every morning to see if any well-known stocks will be reporting earnings. Announcements about companies’ quarterly profits or losses often lead to significant price movements. Be prepared to trade as soon as the news is announced; this is when the most volatility occurs, and day traders can take advantage of this volatility.
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The earnings calendar on Yahoo Finance lists companies scheduled to release their financial results on any given day.
Monitoring Daytime Volatility
Another method of day trading is doing some research during the trading session to find stocks that are moving significantly on that day. You can do this using volatility filters and the top gainers/losers on stock screeners like FINVIZ or TradingView. Most brokers and trading platforms will also provide this information in real-time.
Keep an eye on changes in the list throughout the day. If stocks open down 10% and continue that way, it doesn’t provide much opportunity for day traders. However, if stocks open down 10% and then move in one direction or another, it may be worthwhile to trade them.
You can also use stock screeners to check for stocks that are breaking resistance levels or sending other technical trade signals. With a paid subscription, you can follow these signals intraday in real-time.
Frequently Asked Questions (FAQs)
Which stocks should you invest in when the U.S. market is volatile?
Investors looking to protect themselves from volatile or declining markets should focus on strong core investments. When a company has a solid financial statement, consistent earnings, and a relevant business model, short-term volatility should not be a major concern.
In which months are stocks most volatile?
October is typically the most volatile month in the U.S. market.
What are good moving averages to use with high-volatility stocks?
The best moving average for high-volatility stocks depends on your trading strategy. If you are a day trader looking to capitalize on quick changes, you will need a shorter moving average that is more sensitive to recent price movements. If you are trying to ride out volatility and find good long-term investments during turbulent periods, you may want to use a longer moving average that provides short-term market stability.
Source: https://www.thebalancemoney.com/find-day-trading-stocks-1031458
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