Daytrading Candidates

J

jmiles301

Just wondering how some of you select your basket of daytrading opportunities? In the past I've primarily been a swing trader, although I have occasionally mixed in a little daytrading if I happened to run across an opportunity. Now, I'm starting to implement daytrading into my overall strategy, and its been working out well, but I dont necessarily have any particular way of choosing the stocks that I monitor. Essentially, I have a basket of stocks that I watch simply because of their implied volatility and because I have been somewhat following them for a while, but for no other logical reason. I was just curious how other more experienced daytraders (not scalpers) create their watchlists and the rationale behind it all. So far my strategy is working great, but it just seems that I've kinda chosen my candidates in a haphazard fashion, and I generally like to do everything for a reason.

Thanks in advance,

jm
 
I look for stocks that are a component of thier industry index. I also prefer stocks that are highly correlated with a benchmark index as the stock will tend to lag the index and give you a chance to get in or out of it.

Also, look to strike a combo between volume (the ability to get filled relatively easily) and average daily range (you want something that makes solid moves).
 
what type of ATR are you generally looking for? that seems to make sense...i currently look for the volume + volatility mix, but i might be able to implement an ATR filter as well...

jm
 
Don't focus on gathering a huge/diverse/etc list of stocks. You'll make much more money if you just focus on a sector and a few stocks within a sector.

So, screen a sector and then find the stocks within that sector that you think you can trade.

And if you wanna go the extra step, do the correlations of all stocks within a sector index and rank them in descending order against your trading cadidate. Watch those stocks, in that order, as you trade and overtime you'll gain the confidence needed to put on large positions. .
 
i already have a basket i trade, although its not necessarily sector specific...just wondering what type of typical ATR you look for? i currently screen for volume, volatility, and sometimes linear regression, but im not constantly changing the ones i watch...just curious...
 
Anything greater than 2.50 should be sufficient. Obviously, the ideal situation is a stock that trades decent volume (quick fills), but not too thick... and which moves. You haveta look at order flow if you wanna discern this. Volume and ATR will be a good start.
 
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