A stock having no movement is useless for the traders, there should be a momentum to bet on such stocks to gain the opportunity of booking the profits. For intraday trading, momentum is one of the key factors that encourage traders to trade in such stocks.
Even momentum stock for intraday trading could be one of the promising opportunities for day trading. The reason behind the momentum in stock could be anything but it gives a chance to take advantage of such movement and wait for the profits. The momentum can push the price further in the same direction suitable for day trading.
However, finding momentum stocks for intraday trading is difficult, especially if you don’t have the experience and resources to find such stocks for trading. Here we are going to discuss about how you can find momentum stocks for intraday trading.
Things to Consider While Finding the Momentum Stocks for Intraday
While looking for the momentum stocks for the intraday trading there are various factors that should be considered so that you can find the suitable stock. Below you can find a few considerable factors that you should keep in mind while finding the momentum stock.
Volatility: Stocks with high volatility have a strong movement when there is momentum in such stocks. However, trading in a highly volatile stock could be risky but intraday trading is suitable with the possibility to show a strong movement.
Volume: The momentum would be substantial and sustainable when there is a significant volume of trade in such stocks. Check the average daily volume and compare the volume at the time momentum, if there is enough volume it can be considered for intraday trading.
Timeframe: The momentum could be for many days, hours or the day only. Hence momentum at least for the day is suitable for the day trading. Always consider the timeframe of momentum that lasts for a few hours, as it is suitable for day trading.
How to Find Momentum Stocks for Intraday?
To find the best suitable stocks for intraday trading you can consider the above listed factors. But there are other parameters too, that you can use to find the stocks for the day trading. The momentum in the stocks could be temporary or give a false signal, hence you need to verify or confirm the same, and for that, you have to use various techniques.
1.Sudden Change in Price
A stock with no movement for many days got the interest of traders have momentum when aggressive buying and selling starts in such stocks. A movement with sudden price change is also an indication of momentum in the stock that you can pick the intra day trading.
The reason behind the sudden price change could be anything a news event in the company, corporate actions, financial results begging of huge orders etc. As the momentum starts, it will continue allowing you to buy it for intraday trading.
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