Intraday Stock Tips: How to Select Stocks for Intraday?

Intraday Stock Tips: How to Select Stocks for Intraday

Discover the secrets of selecting the best intraday stocks in our comprehensive guide. Maximise your intraday trading potential and minimise risks with our informative tips.
27 Mar, 2024 10:00am

Intraday trading, often referred to as day trading, involves buying and selling stocks within the same trading day. It requires quick decision-making, technical analysis skills, and an understanding of market trends. One of the crucial aspects of intraday trading is selecting the right stocks to trade. In this comprehensive guide, we'll delve into the strategies and factors to consider when choosing the best intraday stocks.


Understanding Intraday Trading

Before understanding how to select stocks for intraday trading, it's essential to grasp the fundamentals of this financial activity. The objective of intraday trading is to profit from short-term price movements by capitalising on fluctuations in stock prices throughout the trading day. The aim is to buy low and sell high or sell high and buy low within the same day. Naturally, this can be risky if you don’t pick the right stocks, but it can be highly rewarding if you follow our tips to identify the best intraday stocks.


Factors to Consider When Selecting Intraday Stocks

Identifying the best intraday stocks to trade in isn’t rocket science. However, it does require thorough research and due diligence. Here are some of the key factors to keep in mind while selecting stocks for intraday trading. 


  • Liquidity: You should focus on stocks with high liquidity that are actively traded with substantial trading volumes. High liquidity ensures smoother entry and exit from positions without significantly impacting the stock price. It reduces the chances of you getting stuck with a stock with no buyers for it.
  • Volatility: Volatility is the degree of variation in a stock's price over various time periods. As an intraday trader, you should seek stocks with sufficient volatility to capitalise on price movements but avoid excessively volatile stocks that may lead to unpredictable outcomes.
  • Price Range: Intraday traders typically target stocks within a specific price range that aligns with their risk tolerance and capital. Lower-priced stocks may exhibit higher volatility but can also carry increased risk, while higher-priced stocks may require larger capital outlays.
  • Sector Analysis: Understanding the broader market trends and sector performance is crucial for intraday trading. You may focus on specific sectors or industries that exhibit strong momentum or are influenced by significant market catalysts.
  • Technical Analysis: Intraday trading relies heavily on technical analysis tools and indicators to identify potential trading opportunities. Successful traders analyse stock price charts, volume patterns, moving averages, and other technical indicators to gauge market sentiment and price direction.
  • News and Market Events: You should stay informed about relevant news, economic data releases, corporate announcements, and market events that can impact stock prices. Timely information can help you anticipate price movements and make informed trading decisions.


Strategies for Selecting Intraday Stocks

Now that you know how to pick stocks for intraday using a few vital factors, here are some popular strategies that you may consider to select and trade the best intraday stocks.


  • Gap Trading: Gap trading involves identifying stocks with significant price gaps between the previous day's closing price and the current day's opening price. You can take advantage of these gaps by betting on price continuation or reversal during the trading session.
  • Breakout Trading: Breakout trading focuses on identifying stocks that break through key support or resistance levels. In this, you can enter positions when prices break out of established trading ranges, thereby anticipating further price momentum in the breakout direction.
  • Scalping: In scalping, you target stocks with high liquidity and tight bid-ask spreads to execute rapid-fire trades. Since this short-term trading strategy helps you benefit from small price movements, you need to make multiple trades throughout the trading session. 
  • Trend Following: Trend following strategies involve identifying stocks with clear, established price trends and riding those trends for short-term gains. You can use technical analysis tools to identify trend reversals and enter positions in the direction of the prevailing trend.
  • Relative Strength Analysis: Relative strength analysis compares the performance of individual stocks relative to broader market indices or sector peers. In this strategy, you will seek stocks showing relative strength or outperformance compared to the overall market for potential trading opportunities.


Risk Management in Intraday Trading

Intraday trading carries inherent risks due to the fast-paced nature of trading and price volatility. While it is important to know how to select stocks for intraday trading, it is equally crucial for you to implement robust risk management strategies to protect your capital and minimise losses. Here are some key strategies for effective risk management in intraday trading:


  • Setting Stop-Loss Orders: Implementing stop-loss (SL) orders is a fundamental risk management technique in intraday trading. A stop-loss order specifies a price level at which a trader will automatically exit a position to limit losses. You should set stop-loss orders based on your risk tolerance and the volatility of the stock being traded.
  • Limiting Position Sizes: Controlling position sizes is important to manage risk exposure in intraday trading. You should avoid allocating a significant portion of your capital to any single trade to prevent excessive losses. By limiting position sizes relative to account size, you can protect yourself from significant downswings.
  • Diversifying Trades: Diversification is key to spreading risk across multiple trades and assets. You should avoid concentrating your trades in a single stock or sector to reduce the impact of adverse price movements. Diversifying trades across different stocks, sectors, and trading strategies can help mitigate risk and improve overall portfolio performance.
  • Avoiding Over-Leveraging: While leverage can amplify potential profits in intraday trading, it also magnifies losses. You should exercise caution when using leverage and avoid over-leveraging your trades. High levels of leverage increase the risk of margin calls and liquidation, particularly in volatile market conditions.
  • Adhering to Risk-Reward Ratios: Maintaining favourable risk-reward ratios is essential for sustainable intraday trading. You should aim for trades with potential profits that outweigh potential losses by a predetermined ratio, such as 2:1 or 3:1. 
  • Staying Informed: You need to stay informed about market news, economic events, and company announcements that can impact stock prices. By staying abreast of market developments, you can anticipate potential market movements and adjust your trading strategies accordingly. Additionally, you should remain flexible and adaptive, willing to cut losses quickly and capitalise on profitable opportunities.
  • Continuous Learning and Improvement: Risk management is an ongoing process that requires continuous learning and refinement of trading skills. You should review your trades regularly, analyse performance metrics, and identify areas for improvement. By learning from both successes and failures, you can refine your strategies, minimise risks, and enhance your overall trading proficiency. 



Selecting the best intraday stocks is a critical aspect of successful intraday trading. By considering factors such as liquidity, volatility, price range, sector analysis, technical indicators, and trading strategies, you can identify profitable trading opportunities and manage risks effectively. However, intraday trading requires discipline, patience, and continuous learning to navigate the dynamic and unpredictable nature of the stock market. Moreover, the right trading platform, with high-tech tools for stock analysis and real-time market updates for quick decision making, can give you an edge in intraday trading. 

Market Today

View more


View more

Take your research to the next level.
Login now to unlock Exclusive Features!

Take your research to the next level.
Login now to unlock Exclusive Features!

Download Our App On: