Do this once to find a handful of volatile stocks you can day trade throughout the week. The whole process takes about 20 minutes, and your homework is done for the week. No more researching for volatile day trading stocks every day, such as flipping through new highs and lows or a biggest movers list. By watching a handful of these stocks you always have big moves to day trade…especially in the mornings, which is when day traders should be most active anyway.
In the video below, I show you how to find volatile day trading stocks which are likely to see big percentage movements each day over the course of the next week, based on average historic volatility.
This is the method I use to update the Day Trading Stocks Picks each week (the picks include some stocks found using a different method as well).
Watch, learn, enjoy. Resources mentioned in the video are discussed below.
Resources For Finding Volatile Stocks
Volatile day trading stock picks are based on the method(s) described in the video, screened for on StockFetcher.com.
Reasons I like this screening method is covered in Consistent High Volatility Stock Screen For Day Traders. Here is a sample screen/filter you can copy and paste into StockFetcher.com:
show stocks where the average day range (100) is above 4.5%
and Price is between $5 and $150
and Average volume (30) is greater than 4000000
and exchange is not amex
add column Average Volume (30)
add column Average Day Range (30)
What this filter is asking the research engine to do is find stocks that typically move at least 4.5% per day. That’s quite a bit of movement. We are also asking the research to only produce stocks that have a 100 day over 4.5%. So the stocks that show up on this list likely didn’t just move a bunch one day…they tend to move a lot every day. If they have moved, on average, over 4.5% for 100 days, they will probably move a fair bit this week as well. Then next week will run the filter again.
The price filter gets rid of penny stocks, which I don’t like, but you can adjust this filter to find stocks in a price range you like.
The volume criteria make sure that the stock has ample volume for us to trade. On lower-priced stocks often 2 million is enough volume. As the price increases, typically we will want more volume to keep the spreads tight and be able to get in and out with ease. I typically like to trade stocks with 4 million or more in average volume.
The criterion “exchange is not amex” excludes ETFs from the results. If you want to include ETFs, delete this line of code.
The add column functions show us how much the average volume and volatility is over the last 30 days.
If you’re a do-it-yourself type person, and like to look for stocks that are moving a lot each day, look into a Finviz Elite subscription. Use it to see what’s moving in the pre-market and during the day, see what stocks are gapping, and run technical filters for stocks breaking out of chart patterns. This is for people who don’t like waiting around for trades, and instead like actively seeking out trades all day long.
Volatile Stock Day Trading Strategies
The above screening method doesn’t tell us how to trade or which direction these stocks are moving. The screen/filter just tells us that these are the stocks that consistently move a lot. As for how to trade, for that we need a trading strategy. For strategies that work well with these types of stocks, see:
- The Strong Trend Reversal Trading Strategy
- How to Day Trade Stocks in 2 Hours or Less
- Truncated Price Swing Trading Strategy for Stocks or Forex
- Trend Trading: How to Spot Trading Opportunities
- Daily Range Day Trading Strategy
- Day Trade Trending Strategy
Day trading volatile stocks isn’t for everyone. Have a plan for how you will trade them, and test out your strategies before trading with real capital. Slippage is
possible in these stocks. This isn’t an endorsement for the stocks that show up on the list. Pick a handful that move in a way you like, then trade them all week. Run a new scan each week. Typically I find the same stocks stay on the list week after week…which is a good thing because it shows the scan is producing consistently volatile stocks.
This method is just one option for finding volatile stocks for day trading if you don’t want to be constantly researching.
Cory Mitchell, CMT
Follow me on Twitter @corymitc and check out our Facebook page.
Hello great info thanks!
why is it that you can day trade certain smaller cap stocks which move 4.5% of their price per day on average
but some other very large blue chip stocks which move lots more each day in terms of price/dollars but the percent of movement compared to their price is lower, arent great day trading candidates?
It’s a matter of trading what suits you. I can only create lists for the type of stocks I like to trade. If someone else trades differently, then they will need to find day trading stocks that suit their strategies.
Each week a day trading list is published. The second section has larger cap stocks with bigger dollar movements (but not as high of a percentage). http://vantagepointtrading.com/day-trading-stock-picks/ Along with a few other day trading candidates. As you point, these are also fine for day trading, and there are a handful I put on the list each week.
This is not to say that stocks that aren’t on the list are bad day trading candidates. There are many other stocks out there which are suitable for day trading. This article is just providing ONE way to search for day trading stocks.
thanks for th reply.
What i’m really trying to ask is why do expensiver stocks like $200 have a greater average true range and easier move lots more in terms of dollars compared to cheaper stocks like $5. they may have the same true range percentage, but a different absolute true range.
Because if something is $200 and moves 2%, that is a $4 move. If a $5 stock moves 2%, that is $0.10. Same percentage move, different dollar amount.
I am not quite sure what you are asking, but if you are asking why a $5 stock doesn’t usually move $4 in a day like a $200 stock does…well, typically traders don’t adjust their value of a stock by 80% in a day unless something extraordinary happens.
I just wanted to say thanks Corey. I been reading all this stuff about stocks trying to learn because im just starting to trade but you explained a lot more to me then all the stuff I been reading.
When you trade high volatility/volume stocks, are you using Limit Orders or Market Orders? My guess would be that Limit orders could easily be passed over an not filled.
It depends. I don’t usually use market orders unless the stock has a lot of volume and I know the price I will get.
In thinner stocks I typically “cross the market” by several cents if I know I want to get in, but don’t want to use a market order. For example, if there are only a few hundred shares at $20 (current bid $19.99 by $20.00 offer), but I want to buy more than what is available at that price, I will put out an order to buy as many shares I as I want up to $20.03 for example. So I will use a buy order that has a limit above the current price. That way I likely get way more shares, but also control what I pay. This is the only time I look at a Level II…to get a sense of how many shares are available within a few cents.
What platform would you recommend for a person that is just about to start his journey or day trading but can’t meet the numbers of $25,000?
Will $500.00 be sufficient?
Thanks in advanced,
Mr. Sierra
$500 is not sufficient for day trading stocks. The only market that is viable for day trading with $500 is the forex market. Even then, i recommend at least $1000 or more. For forex, most brokers offer MetaTrader, which is an ok platform to start on. The broker I use is discussed here: http://vantagepointtrading.com/favorite-forex-broker/
Is there any benefit from trading such low priced stocks? Isn’t it hard to get a short fill? My broker rarely has penny <5$ stocks available for lending. Wouldn't you be limited to trading long with penny stocks?
I've never understood the attraction to low priced/penny stocks, particularly for day trading. I realize large position sizes may be attractive to some with low capital but since, you have to have a minimum 25k in your account anyway, why trade low priced stocks that can flip so quickly?
I am not sure if you are commenting on this particular article/video, or just asking a general question?
The method discussed in the video filters for stocks only above $5, and in the video I say I don’t like penny stocks. The typed out filter in the article says to trade stocks above $10. Penny stocks are not discussed and I don’t typically find any need to trade them.
Just use Puts
Puts are a great alternative if short shares aren’t available. Although I don’t typically like day trading options; prefer options for trades that last several days to several weeks.