How to Select Stocks for Trading?

Factors to Be consider While selecting Stocks:

Ø  Select a stock which is stuck in a very small range for past few days.

Ø  Charts are the best way to identify stocks for trading. Study the historical charts and find out the up or down ward moving stocks

Ø  Find out the support and resistance levels of the stocks.

Ø  Find under top gainers or top losers. Such stocks may have good movements

Ø  clearly identify the trend of the stock. do not trade against this trend.

Ø  Wait for the stock to break this range in the direction of the trend identified.

Ø  Check the volume of stocks which plays important role do not trade low volume stocks

Ø  Check Open interest which plays important role

Ø  Check Bid/Ask price of stocks

Ø  keep a stop loss just below the candle by which it has broken the range.

Other Factors to be consider:

Volatility:

The stock should be volatile enough to move by significant points even during a trading range. This ensures that you always have a lot of opportunities.

Liquidity:

The stock should be liquid enough so that you can enter and exit quickly and easily.

Indicators:

Observe the signals generated by indicators for a stock.  Like RSI, MACD, ATR, MOVING AVERAGES, WVAP etc….

Strategy:

Choose a Good -trading strategy that fits your personality. Positional, intraday, Swing, Scalping, trend-following, pivot-trading, Open range breakout, Narrow Range Breakout etc.. 

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Price	OI	Analysis		Volume	Price	Analysis
Rising	Rising	Market is Strong		Increasing	Rising	Bullish
Rising	Falling	Market is Weakening		Decreasing	Falling	Bullish
Falling	Rising	Market is Weak		Increasing	Falling	Bearish
Falling	Falling	Market is Strengthening		Decreasing	Rising	Bearish