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How to Select Stocks For Intraday Trading?

How to Select Stocks For Intraday Trading

As far as the concept and meaning of day trading are concerned almost every other trader knows what is intraday trading? But when it comes to how to do intraday trading and how to select stocks for intraday trading, it is where most of the traders get stuck.

So here comes the question is there any specific rules of intraday trading to pick stocks?

A lot of traders who start their trading journey with intraday trading often lack the capability of choosing the right stock.

Owing to this fact, the chances of losses also increase. Since intraday trading involves the buying and selling of stocks in a single day, it is essential to utilise the limited time in stocks that will give you potential gains.

Let us now have a look at the best ways in which you can choose the aptest stocks for your trading journey.

How To Select Stocks For Intraday Trading in India?

Stock selection plays an important role in trading because it decides the fate of your capital. You ask how? Now imagine one of your friends does an investment in the stock market and has one of the stocks that provides him the return of 40-50% in one year.

Without clearing your trading goals and analysis you picked the same stock for intraday trading.

So, here is the question for you.

Did you pick the right stock?

Of course not!

For short-term or intraday trading, it is important to look for the trend, volatility, and technical aspects of the stocks.

The stock offering good returns on long-term investment might not bring you the opportunity to make a potential profit in day trade.

It is therefore very essential that you invest your money in the right stocks because investing capital for the long term and for the short term is totally different.

Let us now take a look at the best ways in which you can choose the right stocks for yourself and earn good returns within minutes.

Focus on Liquid Stocks

Now you have an exam in 15 days and you are looking for a book that will help you revise all the concepts quickly. So, you get a book and thought that after your exam you would sell it off without considering the case, that what if the syllabus or exam pattern changes in the future?

What if the same thing happens in the case of the stock market as well? It is therefore important to observe the liquidity. Liquidity is measured on how easily one can enter into a stock and then can exit as well.

If the stock is traded in good volumes and the demand is also high, it makes it easier for intraday traders to earn a profit. You can buy a high quantity of liquid stocks and can in turn does not even stir the price much. If the traders in a particular stock are not present in high numbers, the prices of the stock will not move smoothly, thus taking away the chances of good profits.

Let us take an example of a stock that keeps on hitting its lower circuit continuously. In this case, there are no buyers to drive the prices of the stock upwards and this is the reason why people often incur losses here.

This also happens in the case of the upper circuit where there are only buyers making it difficult for the traders to exit the stock.

This happened with PNB Housing in 2021, where the stock had only buyers for quite some time, making it difficult for a lot of traders to exit the stock even after making sufficient profits.

Check The Volatility

Now as we talked of liquidity, there is another factor on which it is dependent; the volatility of the stock. While highly volatile stocks can often scare the traders, it is important that you start befriending the market volatility if you want to make money in intraday trading.

Now, the stocks those face price fluctuations are capable of giving you good profits within intraday trading time. So the demand of the stock also decides the volatility. The volatility of a stock is impacted by a lot of factors that include,

  • Any sudden news
  • Announcement of financial reports, bonuses, or dividends.
  • Change in the goals or management of a company.
  • Rumours

Imagine a stock moving 5% in a day, in comparison to a stock moving almost 15-20% in a day! Although volatility might seem very exciting, it can also induce losses if the price moves too fast. It can be great for professional traders but the beginner can suffer losses.

It is therefore recommended to focus more on stocks with medium to high volatility. Highly volatile stocks can give great profits but on the downside, if they move opposite, they can cause losses.

In intraday trading, it is therefore important to put stop-loss so that you can minimize your losses.

Further, you can reap the benefit of a margin facility to increase your profit. However, most of the traders are not reaping the advantage of margin funding after the New Sebi rule for margin trading.

Here it becomes more important for traders to analyze the right stock you can get the way of how to do intraday trading without margin and increase your profit at the same time.

Technical Analysis for Intraday Trading

It is not possible to talk about intraday trading without technical analysis. Combining your research, experience with technical analysis helps you to select stocks for intraday trading.

Technical analysis is the study of market trends, past performances, and then making a decision based on that. It uses various indicators and chart patterns.

If we talk about the best time frame for intraday trading, then you can choose the one-day charts with 5 minutes, 15 minutes, and 30 minutes. A lot of intraday traders also take the help of hourly charts.

Technical analysis is important because it not only gives you an indication of when to enter but also when to exit.

Along with this, talking about the technical indicators, you can learn how to use the ADX indicator for day trading as it helps in determining the strength of the trend.

Other than this there are other indicators like RSI, that help you in determining the trend and give you the signal to enter and exit a trade. To make the best use of it learn the best RSI setting for intraday.

For perfect analysis, use the best combination of technical indicators for intraday trading.

Also, to get the perfect signal it is good to use a combination of indicators in the 1 Day chart.

Choose Stocks That React to News

News plays an important role in the volatility of stocks. Different stocks can react differently to various news. Now if the news is positive, like good changes in the company or profitable financial reports, it is more likely to show bullish trends.

It is also important to note that only believe the news and not the rumors. These can lead to a negative impact on your entire portfolio.

Around June 2021, Adani group stocks faced a major setback. Almost all the stocks saw panic selling forcing a lot of investors to incur losses. What was the reason? There was news that three major foreign investors of the Adani group were banned as they were not traceable. Although later this was discarded the traders who were not careful also went through major losses.

Another instance of news impacting the stock movement is from October 2021, when the board of directors announced a stock split in TTK Prestige stocks. This drove the prices of the stock up and the stock hits its 52-week high.

Thus, picking the right news at the right time and holding the right position can actually help you in earning a good profit in the limited trading hours.

All you have to do is to decide the right entry or exit point with the help of candlestick chart patterns or technical indicators discussed above.

So, keep an eye on the news but also make use of the ones which have some factual data associated with them to select stocks for intraday trading.

Intraday trading requires you to study the market trends carefully. Always ride with the market trends in intraday trading. Now, what does this mean?

This means that if the market is indicating a bullish trend, then you should look for stocks that have the potential to move in the same direction. And if the bearish trend is prominent in the market, then you can look for stocks that are declining.

You can also earn money in share market through intraday trading when the market is in a bearish run. This is done through short-selling in which you sell the shares first and then purchase them.

You can also keep your eyes on the top gainers and top losers as well to decide which stocks you should choose from.

It is also advisable to choose the correlated stocks. Now, what does this mean? This is simply following the index or sector trends. This means that pick the stocks that also moving in the same direction of their sectors.

For example, if NIFTY Pharma is showing a bullish trend, then pick the stocks from that sector that are showing the same movement.

If you keep these things in mind before choosing stocks for intraday trading, the chances of your profit also increase several folds.

How To Select Stock For Intraday One Day Before

Pre-planning is always beneficial and although intraday trading mostly requires fast decision making, you can still select stocks for intraday trading one day before to make sure that you don’t have to face any losses.

But the question now is, how will you do that?

Let us quickly go through some key points that can prepare you for your next day’s trading adventure.

  • Analyze how the market/stocks performed today so that you can actively make a decision for tomorrow. For this, you can keep an eye on the top gainers and top losers. Not only this but also note what stocks hit their circuit ranges today. Apart from this, also look for stocks that had high traded volumes.
  • You also need to carefully observe the news after the market hours that can affect the early trades the next day. Usually the first 15 minutes of market hours, the stocks react to the last night’s news and happenings.
  • Analyze these stocks on different time-frames so that you can actively keep a look and then decide.


There are various advantages of intraday trading, but you can make the best out of it when you are using the right intraday trading strategies, and also picking the right stocks. It is important that you choose liquid, volatile, and stock that has the high potential to yield results in a short span of time.

Intraday trading can be an adventure and if you are also looking to gain profits, open trading account today!

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