How to Pick Good Stocks for Intraday Trading: 3 Tips -- Day Trade with David Moadel
hello and welcome to looking at the markets with David Modell I'm going to
tell you three things that I look for when I am picking stocks to intra-day
trade these are for day trading and before I get started just want to let
you know that if you want more personalized help if you want coaching I
do offer that you can email me for the coaching if you want more help my email
address is right there on the screen David Modell at gmail.com so I'm gonna
go on over to Yahoo Finance but you might use Google Finance or Morningstar
or whatever you like and what I like to look for in a good stock for intraday
trading first of all it's got to have plenty of volume all right we're talking
about daily volume and so you can go to Yahoo Finance type in I typed an apple
you could type in whatever one you'd like and whatever stock you'd like and
then go down past the chart and you can look at volume and average volume now
that's per day so this was today's volume forty-two million or so shares
traded today and then on the average day that's average volume on the average day
50 million so that's plenty okay if it's in the millions that's great it doesn't
have to be in the millions but you don't want it to be like I don't know five
shares traded a day or something like that alright because you're going to be
doing a lot of trading of a stock if you intraday trade it multiple times a day
every day all right and so you want to be able to get in and out of your trades
easily you want them to get filled or executed quickly and easily and at a
favorable or good price so if there's not much volume you might not be able to
buy or sell it at all or it might take a long time you might not get a favorable
price the bid and ask spread might be wide you don't want that because you're
not gonna get a good price alright both when you buy and sell it you're not
going to get a good price so look for plenty of volume doesn't have to be in
the millions but you want it to be decent so that's one
thing I look for all right if the volumes not there probably not a great
candidate for intraday trading then I checked first okay first I do that then
I'll check the price okay let's take Apple it's around two hundred and sixty
six dollars per share and then I look at the 52-week low
all right Yahoo Finance has it it has the 52-week range so in the past year
Apple stock has been as high as three hundred and twenty seven dollars and
changed but I'm looking for the low so the 52-week low was around a hundred and
seventy dollars okay and I usually don't want and there are exceptions to all
these things but usually you might not want to consider intraday trading a
stock that's really close to the 52 week low all right
that's an out of favor stock now if you're a long-term buy and hold type of
investor or maybe even a swing trader who holds for weeks months that kind of
thing then you might want to buy something near the 52 week low if it's a
really great company that's just out of favor for now but you think maybe it's
going to come back soon maybe in a few days or weeks or months that kind of
thing that's one thing even then you got to be careful you don't always want to
do that but it might make sense if your long term or medium term but if you're a
very short term trader then if a stock is really close to the 52 week low you
know the bottom end of the 52 week range that is an out of favor of stock and
it's possible that sentiment is against it at least at the moment and so every
time you go to buy it it might get dumped and you might end up getting
stopped out a lot or at least more than you want to all right so let's check
Apple so let's see the 52 week range the low was around a hundred and seventy
dollars a share and right now it's 266 all right so it's actually closer if the
the high is 327 its it's about you know in the middle
maybe a little bit closer to the high than the low so at least it's not near
170 so it's not near the 52-week low that's the important thing all right
that's just me trying to do the math in my head you can use a calculator if you
want to see if it's closer to the high or the low but if it's really close to
the 52-week low then probably no or maybe not as such a great candidate all
right again there are exceptions and then the
third thing I look at is you can go on here's tradingview dot-com but you can
use whatever you like for the chart and then I want to look
for rolling hills that's a funny name right right rolling hills that's what I
call it I'm sure other people thought of that also but that name but i call them
rolling hills all right because that makes it easier to profit in in many
different trading systems for intraday trading all right because you know you
can get in and then take a profit when it's high and then you can get out all
right and then you can get in again at the bottom and then take a profit when
it's high and then get out and then get it at the bottom again so you can rinse
and repeat right you can make money over and over and if you play the short side
of it which is risky it's not for you know a lot of people definitely not for
beginners going short I usually don't recommend it there you know maybe there
exceptions to that but you know if you play the long and short side then if you
get those rolling hills and hills and valleys I guess you could say then you
could go long at the bottom and then go short at the top and then go long and so
you know you can make money you know but in both directions you can make money
going short and then make money going long and then make money going Shore and
then long short long and so on all right so this is the type of chart you want to
look at and so you can go you know you can scroll to the left you can you know
look at the historical price movements day after day minute after minute and
see if it has those rolling hills it doesn't have to have it all the time
it's probably not going to have it all the time it's not picture-perfect always
but if you have a stock that doesn't often look like
if it's just you know down down down with without any hills or not too many
hills or just up up up and away you know then that might not be a great candidate
for you know long and short trading or even just for long trading because it's
hard to rinse and repeat that if it's just totally going in one direction
especially if it's only going down that's that's not usually good for
intraday trading unless you're going short all right so that's that's a
pattern I like to look for and some stocks seem to be better at this than
others and this is for trading systems that have this kind of thing like I put
two moving averages up there and so with a moving average crossover strategy you
can play those rolling hills or with the RSI you know you're you're if you're I
don't know let's say 30 and 70 is oversold and overbought and so you can
buy when it's oversold then and then sell it or short it wants overbought
rinse and repeat still kind of a rolling hills kind of thing with the RSI or
stochastics whatever it is see you know a CCI commodity channel index whatever
rolling hills kind of indicator that you're using or to you know moving
averages that kind of thing alright so there you go that those are three things
that I would look for not the only things necessarily but I wanted to limit
it to three for the sake of this video thank you so much for watching and
listening if you want more help then you can email me for coaching I do offer
that David Modell at gmail.com and I hope to talk to you again soon thanks a
lot