What Kind of Stocks Should I Pick for Intraday Trading?

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Intraday trading is all about knowing how to select intraday stocks. These intraday trading stocks are based on different factors. In an intraday trade, one needs to square off their position at the end of the day. The intraday trade works on a small fraction of time where stock price changes are small but evident. In intraday trade, one needs to plan every action on trade.

This article is all about how to find some good stocks for intraday trading. One needs to know about different qualities of stock that will directly or indirectly make the stock ideal for intraday trade. This is unlike the delivery trade, where one buys shares to sell them when their price increases, whether it takes a day, week, or a month. The key element of selecting good stock for intraday is the market situation. In real-time, the market situation can be messy, and painting a clear picture can be tricky. To clarify, one needs to know about the price movements, why they are moving, and what other traders are doing about it.

Learn More about Intraday Trading

Intraday trading is also called day trading, where one can hold their position till the end of the trading session. Intraday traders often use indicators and technical analysis to support their trade. Although no tool can guarantee profits, one can rely on stock news and analysis.

Liquid Stocks

Liquidity is a primary factor that can help investors trade without problems. As an intraday trader, one can choose the right stock to trade during trading hours based on their liquidity. Liquid stocks have huge trading volumes where large shares are bought and sold in the share market. Trading with less liquid stock will not provide traders with an opportunity to make returns. Some traders can tell that illiquid stocks can provide better opportunities with rapid price movement. There is indeed a chance of a good return, but the risk is quite high, and due to less trading volume, there are chances where the stock price will remain constant, and there will be no movement in the following link. Nonetheless, the liquidity of the stocks depends upon the number of trades that are taking place and is an essential factor for intraday trade. Defensive stocks are a category of stocks known for their stability and ability to withstand economic downturns, making them a preferred choice for investors during periods of market volatility or recession.

Before investing, check the liquidity of the stock at various price levels. Some stocks may be highly liquid at lower prices, but a drastic volume drop at a certain price indicates an unlikely return to normal. Understanding the variability of liquidity at different price levels will help one buy the right type of stocks intraday.

Avoid Highly Volatile Stocks

Day traders can benefit from the price moves, whether they’re up or down, as per their expectations. Sometimes, traders book losses if the stock price moves against their investment. If the stock’s price is volatile, then traders can place their intraday order. But note that buying highly volatile stocks can be highly risky. The impact of highly volatile stock can be counterproductive if the price drop is too steep.

In the market, there are factors that can affect stock prices, such as economic, political, social, etc. Stocks can go upward or downwards. A stock can have a positive or negative correlation with the financial markets. This means if the market rises, there is a good chance that the price of the stock will also move upward along with the market.

Sector Trends

There are different sectors or industries in the stock market. These sectors are automobile, oil, gas, FMCG, banking, and many more. As an intraday trader, it is important to keep the tap of all sectors and understand the performance of all sectors in the market.

Suppose one identifies any sector which has been consolidating for some time. As a breakout is near, one can look for companies from the said sector to invest in. Also, if one identifies any stocks that have substantial growth, one can add them to intraday stock buckets. Check the peer competition and also identify the potential growth.

Trending Stocks

Another important factor one must know is the trend. Stocks that follow the trend are always beneficial. Trends are of two types—uptrend and downtrend. These trends indicate the price of individual stock, which makes indices such as Nifty 50. During a downtrend, it’s better to sell or avoid investing in stocks that are going to decline over time.

Technical analysis and determining the support and resistance is a part of planning a trade. Doing research and finding the right type of stock to trade intraday will take time, but eventually, it is very useful for traders.

Example of a Successful Intraday Trade 

Suppose one buys 500 shares of Tata Power in the morning at ₹220 and sells it by noon at ₹228, then one can book a profit of ₹4000 (500 x 8) intraday trade. The trade does not result in any delivery as a net position. One can also sell the stock in the morning and buy it again in the evening if one thinks that the stock price will fall. In fact, if one wants to short-sell stocks, then the only way to achieve this is by doing the rolling settlement mode on intraday.

In intraday trading, the most crucial step is to select good stocks for intraday trading. Some of the points one must note before selecting a stock for intraday trade are:

  • Look for stocks that have been moving in the same direction for a couple of hours. A stock that has movement is a good sign for intraday trade.
  • Select a pair of stocks that are moving against each other. This might indicate overbought or oversold stocks.
  • Following a price trend with technical indicators is also a smart way to mark one’s entry and exit points in intraday trading.


Identifying the ideal stock for intraday trade is not easy. One needs to look at the news and calculate the price of stock involving risk and ratio. A trader’s task is to capture the trend and certain features, such as liquidity and correlation and characterise which is the best intraday stocks.

Studying trendlines and charting prices can come in handy. There are many ways to trade and figure out how their trading action can affect the price. Finally, one can have great confidence in stocks where one wants to invest in intraday trade.

Frequently Asked Questions (FAQs)