How to Find Stocks to Trade

You can not make any money if you don't trade the right stocks. You could have the best tools, platforms and strategy. If you don't know how to find the right stocks you will lose money 100% of the time. Many beginner traders think you can just trade any stocks and make money. There are key features that traders use to find the best stocks.  “Trade the best, leave the rest” Is a common saying in the trading world. It means trading a stock that doesn't move is time and money wasted. As traders we have to be very efficient with time management because if you watching the wrong stocks you are missing out on a opportunity somewhere else in the market.  There are many different type of ways to find stocks in play and also many different ways to trade them. Some traders only trade exchange-traded funds only. Also people will only trade hot sector like Oil, Tech or Gold. They find a strategy that works well for them and they only trade what they know.  Many hot stocks offer a great risk/reward setup opportunities. These stocks have a lot of volume and you will often find stocks with a downside of 10 cents and a upside of 30 cents, thats a 1:3 risk to reward ratio. These hot stocks have predictable moves, traders try to scalp part of a trade that is more predictable. Most days I will find four stocks that I like premarket that I see a high risk to reward.  Each morning I search for the pre-market gappers, these are the stocks that have volume and some time of fundamental catalyst such as news, earnings or FDA approval. Now not all stocks that have news will move the way you want them to move. When the stock is up 40% pre-market it has downside potential but if it is a low float stock with high volume, it could push to 50% or even 100%.  Each day, there different stocks that are hot and find momentum. As day traders we are hunters of volume, stocks that have volume have more predictable price actions. During the day I have many scanners running that are filtering out stocks that meet my criteria. My main scanner is the “Breaking out on Volume Scanner” this filters out stocks that have low volume during that time, so if a stock suddenly gets a ton of volume I will get notified. Stock Criteria Now as you learn more about stocks you will learn what types of stocks make the best moves and are more predictable. This is what I look for:  Low float (Under 15 Million)  Fundamental catalyst (News, Earning or FDA approval- disapproval  Price $3-$6  Above average volume