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Day Trading

Stock Market Instrument

Investment Today I am going to give answer of that question that repeated many time in feedback. Many day trader asking which instrument you using to trade in stock market? And what are you recommending?

Selecting instrument is a first step for day trading. There are lots of verities available that can suit your strategies. For day trader there are many stocks and ETF’s that are moving with Index. Here important part is which one is the best? Selection of instrument for day trading particularly depends on our trading strategies.
Here are some basic about instrument selection.

Stock day trading

For stock day trading you are looking some stock as per your trading plan. If you don’t have any strategies fix then first decide that first. Basically for stock day trading you need to select high beta stock that is trading with reasonably good volume. Higher beta stocks moves faster then low beta stock. When we looking for short term gain its naturally we need stock that move faster, only the problem is if you sit in wrong direction you loose more money, so select beta that can suit your risk tolerance. You can play news like earning, new product, certification or some new development. For day trade my choice goes on market leaders, that way it make easy to identify from short list. It’s a very easy to find out market leaders by sectors. Make a short list by sector and include three or four stock for each sector, so you don’t have to watch many charts and looks for technical analysis.

Other way you can go with stock that got heavy weight in index in other word that moving index, like Aapple, Google, Microsoft, Bank of America. You can consider these as a day trading instruments.

Other is technical reason to buy or sell. You can consider gap, because majority time stocks price come back to fill up gap. Head and shoulder breakout, double top or bottom breakout, there are many just consider your favorites. Many chart provider giving tools to find out that type of stock, considering beta, volume, and support resistance you can day trade.

Penny stock also a another option to day trade with less money, you can select penny stocks that trading with high volume so you can enter and exit when you wise, with low volume many time trader stuck, you see price gone up but there are no buyer so stay alert in selection. Go with breakout or picks penny stock applying same technical analysis like normal stock or you can go with our penny stock picks

ETF Day trading

ETF is a best option, you can find many ETF that design to trade sector, selecting sector wise ETF offer better option to day trade sector, again there are ETF related to commodity like oil, gold, copper etc.

Here are well known ETF list :
  • Oil – XLE , OIH
  • Gold – GLD, HUI
  • Bond – TLT
  • Finance – XLF
  • Index ETF S&P 500 – SPY
  • NASDAQ – QQQQ
  • Dow – DIA
  • Russell 2000 – IWM
ETF mentions above all are doing well with market movement and again they are trading with huge volume, so day trader can take entry at any time and same way exit at any time due to huge volume there are no problem for trade confirmation. These all are the best instruments for day trading.

Stock Market day trader love Option of ETF like IWM, DIA, SPY and QQQQ as Instrument for Day Trading.

Option day trading

Option day trading is not advisable to inexperience trader. For option day trading you can select any option for above mansion ETFs or you can go for high volume stock options or Index option. ETF and Index make our work easy to do technical analysis, because you don’t have to search for stocks and check each as per your strategies.



Investing Basic

Day trading Basic
How to find stock for Day Trading
Day Trading of Stock & ETF Option
Stock Market Instrument
Importance of Media in day trading
Stocks For Day Trading With Support | Resistance
Importance of Stop Loss
Importance of News in stock trading
  



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