Day Trading For Stocks
In the business of day trading, you must have some knowledge about the basic characteristics of the stocks. The
following characteristics are the most important:
- Liquidity
- Spread
- Volatility
As mentioned before as well that the liquidity refers to easy entry and exit from the trading. If there is some problem while business is in progress such as channel breakout then liquidity ensures that nobody will control the movement of the stocks. Liquidity also reduces the difference between ask and bid. This is also referred as spread and this helps in reducing slippage. The slippage is the difference between current price and executed price.
If you want to trade 1 000 rupees for a particular stock then it is better that the stock’ volume is higher than 100 000 rupees daily to make sure that you will get the best execution (Small slippage).
Volatility is defined basically as the actual or expected price movement of a stock within the trading. This is another important factor that traders need to consider while trading. There is a lur of making big and quick profit. Thus you should know the volatility so that you can have knowledge of the movement of your stock. All these factors are available as filters in Trade-Ideas and they are necessary to catch only stocks that are suitable for day trading.
