How to Select Stocks for Intraday?

Intraday trading is one of the most popular trading strategies in which traders initiate and execute all trades on the same day.

As a day trader, choosing stocks for intraday is an essential skill that you must practice. Whether you are a professional trader or someone new to the market, picking the right stock is critical.

Many factors go into selecting the right stock for intraday trading, including the company’s financials, the stock’s volatility, and the time of day the stock is traded. With careful selection, making money in the stock market through intraday trading can be rewarding.

What is intraday trading?

“Intraday trading” describes the buying and selling of a security within a single day (i.e., before the market closes). This type of trading is done by traders interested in making smaller and quicker profits.

Intraday traders do not have long-term goals for their investments; instead, they are looking for short-term gains during the same trading day.

Intraday traders minimise the risk of impact from overnight events. This trading method aims to take positions for shorter time intervals and book smaller profits during market hours. Intraday traders sometimes aim to take more than one trade on the same day.

How to select stocks for intraday?

Many traders wonder what is the difference between how to pick stocks for intraday and how to select stocks for long-term investment.

It is crucial to do real-time market analysis while choosing stocks for intraday trading in India. Traders need to understand how the price moves, why it moves, and what other traders do to make wise selections.

As a trader, you can consider the below points when choosing stocks to trade intraday.

  1. Liquidity

    When selecting intraday trading stocks, liquidity is a crucial factor to consider. If a stock has high liquidity, It means that it has a higher volume, which means more people are trading that stock. If more people are trading a stock it means, the buy and sell orders can be executed swiftly as well.

    This prevents issues with finding a buyer or seller when the time comes to square off the day’s position. Liquid stocks often have high trading volumes that allow day traders to buy and sell without dramatic changes in prices.

    Stocks’ trading volume, market depth, and bid and offer prices can be used to determine their liquidity.

  2. Volatility

    Volatility is another key aspect that a trader needs to consider while choosing stocks for intraday trading.

    However, the relationship an investor may have with a volatile stock is not the same as that of a day trader. Day traders usually appreciate volatility to a certain extent. This allows them the necessary price movements to cash in from. If the prices stay stable throughout the day, an intraday trader will not be able to make profits from the price movements. Thus, volatility is important for intraday traders, however, it is a two-edged sword and can cause severe losses as well, if not handled appropriately.

    However, extremely volatile stocks can be avoided.

    While trading in volatile stocks, using a stop-loss order is usually recommended. If the stock prices move against you, your stop-loss order can prevent you from significant losses by squaring off the open positions.

  3. Market Trends

    Staying on top of recent trends is significant for intraday traders. They can make the best of their trades by keeping themselves updated with all the recent happenings and developments in the market. If there is a certain kind of sentiment prevailing in the market, it is wise for intraday traders to devise their day trading strategy based on these factors. This allows them to capitalize on the trend. On other hand, going against the trend can sometimes cost the traders in terms of exaggerated losses.

  4. Sector Trends

    The markets can be further segmented into various industries, such as banking, FMCG, technology, automotive, pharmaceuticals, oil & gas, etc. Day traders need to stay updated with the developments in these sectors to make the most of their intraday trades.

    If traders can identify early trends in these sectors, it will allow them to take positions accordingly and capitalize on such trends. For example, the rise of the EV sector is an example in the recent past.

  5. Momentum of Stocks

    Stock momentum is a term used to describe how quickly a stock’s price changes over time. Traders may use this to gauge how strongly the stock price is moving in a certain direction.

    Momentum stocks are those whose prices rapidly move in a certain direction based on the event or trend. Day traders look to utilise the opportunity presented by these stocks on either side of price movement.

  6. Technical Analysis

    Traders can also conduct technical analysis of stocks to identify buy and sell signals. They can use technical indicators such as MACD (Moving average convergence/divergence), Moving Averages, RSI (Relative strength index), Bollinger Bands, etc., to identify price movements.

    They can also utilise indicators to show which stocks are breaking their support and resistance levels and accordingly take their day trading positions.


To succeed in intraday trading, picking the appropriate intraday trading stocks is crucial; as a result, make technical analysis your companion. Moreover, by following the above tips, you will have a clear understanding of selecting the right stocks for day trading. Finally, to avoid emotional bias, ensure your judgments are data-driven.

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If you want to spot liquid stocks, you must note the stock volume and the spread between the bid and offer prices. The stock is seen as liquid if there is less of a gap between the bid and offer price. When there are more buyers and sellers for a specific stock, resulting in more orders, its volume is said to be high.

Stock-specific news can affect the price, such as the company’s financial reports, strike or shutdown, dividend declaration, fire breakout, etc.

General news, such as Government policies, election outcomes, international trade disputes, etc., also affect the stock’s prices.

If the shares purchased for intraday trading are not sold before the market closes, the brokers will square off your holdings at whatever price is offered as per SEBI guidelines.

Trading in intraday costs a little more than delivery-based trading. On most brokers’ platforms, the fees for intraday trading are comparatively higher. These fees include transaction fees, brokerage, GST, stamp duty, etc.

It is not necessary that you choose new stocks every day for intraday trades. If you feel comfortable with the strategy around a specific stock, you can continue trading on that stock daily, till you invest time to create a strategy for another stock. Remember, intraday trading requires focus during market hours and sincere analysis of the stocks you are planning to trade in.