5 Rules to Select Stocks for Intraday Trading | Espresso

5 Rules for Selecting Stock for Intraday Trading

Intraday trading is the most common form of trading in the stock market. Here, traders open and close the trades within one day. So, the traders who enter and exit the trading platform within one trading day are known as intraday traders.



In order to achieve success as an intraday trader, one needs to choose the right stock for intraday trading. If you wish to finally take a step towards intraday trading, you need to be able to pick the right stocks, at the right time. Often traders fail to pick the right stocks and end up incurring major losses.

In this blog, we will learn about 5 very simple rules that every intraday trader should be aware of while selecting stocks for a day’s trading.

Here’s How You can Select Stocks for Intraday Trading

1. Trading in Liquid Stocks

The first and foremost rule is to choose the most liquid stocks for investment. The liquidity of stocks is one of the major tricks to gain profits in an intraday trading session. Liquid stocks usually have large volumes and hence, the traders can trade in large quantities while selling or buying the stocks without significantly disturbing the price. Also, the lesser liquid stocks usually do not offer traders the opportunity to buy or sell large quantities of stocks due to the lack of available buyers.
Also Read: What is Illiquid Stocks?

2. Investing in Correlated Stocks

There are several intraday stock trading strategies available, however, the right ones are just a few. So, in order to start your intraday trading journey, you need to start with a simple one. And investing in correlated stocks is one of the simplest ways of making profits in intraday trading.

The performance of the correlated stocks gives a better idea of the stock trend and makes the investments relatively easy. You can check the performance of stocks from a specific sector from NSE’s website and select the stock that shows an upward or downward trend.

3. Staying Away from Volatile Stocks

The gains of an intraday trade are highly based on the stock price movements. So, while investing, the investor needs to avoid investing in volatile stocks. Even though such stocks may seem enticing, the results may not be much desirable. Intraday trades are usually placed with a stop-loss order. And hence, investing in a volatile stock can trigger the stop-loss order which may automatically cut your active trading position.

4. Following the Stock Market Trends

The stock market trends are often used to determine the stock price movements. So, for maximising profits in an intraday trading session, it is best to follow the market trends. As an intraday trader, one must choose a stock that may have the potential to rise once the market is bullish in nature and vice versa.

5. Picking Up Stocks from Transparent Businesses

Finally, always trade in the stocks of businesses that are transparent in nature. Make sure that there is sufficient information available about the company whose stocks you are eyeing. This way, it will be easier for you to make decisions as you will have every single piece of information about them in place. Also, in case any crucial information of a business is hidden and you end your trading in its stocks, you may incur losses in the long run. Only a company that has stable management should be considered for intraday trading by the investors.


For an intraday trader, selecting the right stock is essential for making profits. There are different parameters to keep in mind while selecting the intraday stock for today. And the above-listed 5 points can help you make the right decision about the stocks on an intraday trading. All the best!

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Frequently Asked Questions

A trading platform is usually software through which traders or investors can open, close, and manage their stock market positions through a financial intermediary.

Active stocks in intraday trading are the heavily traded stocks on the trading platform on an exchange with lesser bid-ask spreads and better liquidity.


Go for liquid stocks which have medium to high volatility. Also, monitor the stock charts, go for the trending stocks and also, choose the high volume stocks.

Today's high refers to a certain stock’s intraday high trading price. It can also be termed as the highest price at which a security or a stock is traded during the course of the day.

Trend analysis in intraday trading is a technique that is used by analysts for technical analysis in attempting to predict future stock price movements based on freshly observed trend data.

Market timing is basically a misunderstood concept in stock trading. It is nothing but a good exit strategy that has been implemented correctly by the trader.