Stock Selection For Day Trading In 7 Simple Steps – Intraday Trading Strategies 🔥🔥

– [Instructor] In this
video, I will be showing you 7 simple steps
which will help you in stock selection for Intraday
trading and Day trading. In case you’ve landed
directly on this video, do start with Part 1 of
intraday trading series, link to all those
videos is given in the description box
below, so let’s get started. So before we get started
with seven important steps for stock selection,
let me take 30 seconds to talk about stock
universe for day trading and intraday trading. The most common
mistake by traders is to track too many
stocks in a watchlist. While this is not wrong
watchlist in the beginning should be limited to no
more than 10 to 15 stocks. As an intraday trader
you have to be smart about sector selection. You need to divide sectors
into primary sectors and secondary sectors. As far as I am concerned
my primary sectors are banking and
financial services. And secondary sectors
are infrastructure, realty, metal, auto and energy. Now primary sectors
are those sectors where you will first
look for intraday trades. If you cannot find
one in primary sectors then switch to the
secondary sectors. Now more often than not your
primary sector selection should be such
that you should get abundant opportunities to trade. Now unless you narrow
down your watchlist, your learning curve
would never reduce. You need to have a small
watchlist of stocks to understand how you
react to price movement on intraday basis. This way you will learn a great
deal about your watchlist, about yourself and
about the method you are using to trade
on an intraday basis. Now as you gain experience
you can then start to expand your watchlist
as you would then know which stocks to select and
which stocks to ignore. Keep in mind that getting
successful in intraday trading is a long-term process and
don’t expect short-term results. The first step in stock
selection for intraday trading is to check for volumes. Trading volume can
help a trader identify momentum in a stock
and confirm a trend. If trading volume increases, price generally moves
in the same direction. That is if a stock is
continuing higher in an uptrend, the volume of the stock should
also increase with the trend. In intraday trading
apart from momentum, volume is used to
identify interest within the traders for
the particular stock. If volumes are high
clearly more participants are interested in the stock, and if volumes are
low this would signal less interest in the stock
and one should avoid it. Now while volume is
a very popular filter for stock selection
in intraday trading, let me show you how
to use this correctly. Just scanning stocks
that are high on volume is not sufficient,
you have to learn how to spot demand of
stock as an instrument. In the chart in front of you, there are three volume
charts I have posted. I will be now showing you
how to spot those stocks that are attracting a lot of
attention in recent times. In the first volume
chart if you see you can spot four
distinct volume spikes
that have happened. In a normal volume
scanner this stock will show up as a
high volume stock due to the activity that
happened few days back. If you look at the
recent times however the volume is clearly
below its 100-day average. This reflects that
while stock attracted high volumes a few days back, currently it is not
a favorable stock as interest in the
stock is diminishing. If you spot such volume
pattern on a stock, stay away from that
particular instrument. In the third volume chart
you can see that this stock has had no significant
interest from traders. This clearly reflects
that stock is not in favor and hence it should not be
selected for intraday trading. For identifying if stocks
are in demand or not, you can simply use
100-day moving average on a standard volume indicator. So let us now come to
the second volume chart. Now these are the stocks
you have to select for intraday trading where
clear interest of traders is reflected by
consistent volume spikes above the 100-day
average of volume. For a prolonged time
interval volumes were clearly below the 100 days
average and then suddenly volume started spiking
above 100-day average. This is a clear signal
that something underneath is changing and traders
are clearly more interested in this stock in recent times. This was absent in the
remaining two volume charts that I have posted. The important point here
is to focus on those stocks that are seeing more buyer’s
or seller’s interest. In intraday trading you need
to be in those instruments which will fluctuate
in the very short term. This is the only way you
can increase your odds of being profitable. Volume is thus one
such important filter that will help you focus
on the right stocks at all the times. In this chart I have used
a standard volume indicator with 100 period
moving average on it. This is available in
all technical platforms, both desktop and web-based. Second step in stock
selection for day trading is to check for
open interest trend. Now I had covered the
importance of open interest when it comes to
futures and stocks. And if you need to learn
about this in detail then do watch the
dedicated video on this. Link to the same will come
up at top end of your screen. For intraday trading
you need to make sure that open interest is
clearly trending up. If it is not trending as
I’ve marked on the chart, then just stay away
from the stock. Do not forget that open interest is a measure of the flow
of money into a stock. Once open interest starts
trending it continues to do so for the remainder of the series. Now rising open interest
represents additional money coming into the stock, it
is generally interpreted to be an indicator of
existing market trend gaining momentum or
extending further. Now since you are trading
on an intraday basis you can just consider current
month’s open interest data. In the last week
of expiry however, take note of the current month
and next month data together. This way expiry week won’t
distort open interest data. I hope this particular
point is clear. The third step in stock
selection for intraday trading is to check for volatility. For measuring volatility here I am using historical
volatility indicator. Code for is in the comment section below. If you cannot find the
same just let me know and I will share it again. Now as an intraday
trader it is imperative for you to understand the
importance of volatility. If an instrument is
volatile you can profit more as it will move a lot. If an instrument
does not move often, it would be difficult
for you to profit as movement will be limited. Now I have posted two charts
and let us go through both to understand what we
need to spot in stocks, we wanna shortlist
for intraday trading. In the first chart volatility
is clearly heading lower. Within this if you try
to trade this stock on an intraday basis, your
scope of profit would reduce as movement will be limited. If you spot this on a
chart then avoid trading this stock on an intraday basis. In the second chart
if you see volatility is clearly moving higher. It surpassed the previous
congestion region and is now on its way up. These are the stocks
you have to target as these stocks will move
more on an intraday basis. You have to ensure
that volatility trend should be clearly visible
and should be on the upside. By following this simple step, you will dramatically
increase the odds of being successful in
instrument selection. The fourth step in stock
selection for intraday trading is to check for stocks near
52-week highs and 52-week lows. If you study all the stocks
near 52-week highs or lows, you will find one
thing in common. And that is stock tends to
make more wide-range candles. Now for an intraday
trader this is significant as movement is what one wants and such stocks have
this in abundance. For creating an intraday
trading watchlist, always keep a tab on
stocks near 52-week highs or 52-week lows. This is one of the
most effective ways to be in stocks which
will move for sure. Always remember that a stock won’t be at 52-week high or lows unless it has extraordinary
demand or supply within it. Now I’ll come to more on this
in the application section where we will take
up some case studies. Fifth step in stock selection for day trading is
to check for stocks that are clearly
trending higher or lower. Now I cannot emphasize
this point enough. Now quite often traders
unknowingly select stocks which are stuck in a range,
this should be avoided. Like we saw with the
first three steps, you have to be in those
stocks that are in demand and trending stocks
again represent this. Now while selecting a
stock you need to make sure it is trending higher or lower for two to three
months at least. This way you would be in stocks
which are already in motion and have some bit
of momentum as well. Always remember this that
if a stock does not move it will be difficult
for you to profit from. For an intraday trader movement, trend and momentum is a must. Now the sixth step
in stock selection for intraday trading
is to check for stocks where demand and supply
candles are easily visible. This is something
which should be checked on a candle volume chart. Now let me show you what
exactly you need to identify. In the chart in front of
you I have taken an example of Tata Motors as a stock. For the first half
of the last 12 months there were limited
demand and supply candles visible on the chart. However, over the last
three to four months demand and supply candles
are easily visible and are in abundance. This clearly represents
that Tata Motors is in focus as a
stock and interest within this stock
is clearly evident. If you spot a chart
which looks similar to the first half
of this chart here, then let that stock pass. You have to only
focus on those stocks where demand and candles
are clearly visible. Now this simple
step will help you eliminating 50 to 60% of stocks from your intraday
trading stock watchlist. Seven step in stock selection
for intraday trading is to check for stocks with
clear relative strength trends. Now relative strength
is price of stock divided by price
of benchmark index. If you are unaware of relative
strength as a concept, refer to the video
link that will come up at top end of your screen, I have covered this
topic in detail. Now clear relative strengths on the upside represents
stock outperforming the broader market and relative
strengths on the downside represents stock underperforming
the broader market. If you wanna buy
stocks prefer stocks that are outperforming
the market. And if you are short
selling stocks, prefer stocks that are
underperforming the market. Now since you’re trading
on an intraday basis don’t try to identify
a relative strength over long periods. You have to look for
relative strength trends over the last four to
five sessions only. You can also stick to
last three sessions and this would also be fine. The main idea here is
to be with short-term relative strength
trends and not refer to medium term or
long term trend. Now that we have
basic understanding of the steps involved
in selecting stocks for intraday trading,
let me now show you how I will select couple of
stocks for the next two weeks. I will be selecting
banking sector here and within this sector
I have kept six stocks in the watchlist. Now I will be showing
you how I will select one to two stocks
within this sector, so that you can understand this and practice this on your own. First stock I have
taken up is Axis Bank. Now based on candle
volume chart, some demand and supply
is clearly visible but I would have expected more. Especially from a
stock that is trading near its 52-week high. I can also see that
in recent times a relative strength line
is sloping downwards. I would at least
want this to be flat or to be sloping upwards. I like to begin with
these first two steps and then if stock qualifies
based on these steps I go into further steps. For now I would
pass on Axis Bank. Second stock I’ve taken
up a State Bank of India. Now based on candle
volume chart alone, some demand and
supply is visible but one can just spot
two such candles. A relative strength line
is again sloping downward in recent times and
this clearly means that stock is underperforming. Now this is very
similar to Axis Bank and for me on both
these parameters State Bank of India
does not qualify. Third stock that I’ve
taken up is of Yes Bank. Now based on candle
volume chart, can’t spot too much of interest in the stock over
the short term. Relative strength line is
again sloping downward, this clearly signifies that
stock is underperforming. Again this is very similar
to Axis Bank and SBI, hence I would again
move to the next stock. One important point to note here is that more than a
relative strength line, I like to see strong
demand and supply candles over the very short-term. Fourth stock that I have taken
up is Kotak Mahindra Bank. Now this stock looks positive. Relative strength line is
clearly sloping on the upside and demand and supply
candles are also visible. I would have still wanted
more recent candles to be strong but I will still
shortlist this stock for now to probe it further
on other parameters. Now since I
shortlisted this stock, let me now bring
in more parameters to see if this stock
qualifies further. Now stock is trading
near 52 week high which is another positive sign. If you look at the chart
it is relatively clean and is trending higher
although momentum is clearly on the lower side. If you now look at the
volume activity for the stock it is clearly not supportive. After a spike seen
here in February, no high volume activity
is visible as such. Since this stock qualifies
on some parameters I will still shortlist
this stock for now. Let me now move to other
two remaining stocks and then we will revert back
to Kotak Mahindra bank again. Fifth stock that I’ll
take up is ICICI Bank. Now demand and supply
candles are visible here but I would have still preferred some strong candles
in recent times. Relative strength line though
is showing positive signs and hence I would like
to probe this further with trend structure
and volume activity. In recent times trending
structure within ICICI Bank is clearly visible and stock is trading close to
52-week high level. Volume performance if you
see is not encouraging. After a couple of
sessions in the past where volume activity was high, current performance of volume
is not encouraging at all. ICICI in some ways
is very similar to what we saw in Kotak Bank. While relative
strength line is up and stock is near 52-week high, there is very little interest
in the stock in recent times. I will still keep
this in watchlist along with Kotak Mahindra Bank. Let us now move to the
last stock in this sector. Sixth stock I will take
up is Indus Ind Bank. The first thing you
notice in Indus Ind Bank is the strong demand and supply
candles that are visible. Among all the banking stocks
that we have seen till now Indus lnd has some
consistently strong demand and supply candles
in recent times. RS line is not
encouraging enough, it is still sloping downward but let us look at price
trend and volume activity. While price is not
near 52 weeks high price in recent times
has still trended higher. If you look at the volume
activity of Indus Ind Bank again signs are positive as
volume is consistently moving above the 100 period average. This was something we saw in
no other banking sector stock. If one looks at the
open interest trend and volatility
outlook then Indus Ind seems to qualify here as well. Open interest is picking up
after phases of consolidation and after a prolonged period
of volatility moving lower, now signs of volatility
picking up is clearly evident. If you look at the
price action as well after prolonged range price has
now started moving up again. This is again a
very positive sign. Out of the seven steps
that we have seen, Indus Ind Bank qualifies
on most parameters. Therefore this is
definitely going to be selected as a
valid intraday stock. Let us now go back to
ICICI Bank and Kotak Bank to see which of these
two stocks qualifies as a valid intraday stock. Let us first take up ICICI Bank. Now after some
consolidation ICICI Bank is now again moving up. Chart structure is
relatively clean and it is trending higher. Open interest trend if you
see is positive as well and it is seeing a pick
up series after series. Downward volatility
cycle has ended and volatility is making
attempts to move high again. Now while ICICI Bank does not
qualify on volume parameters that is both standard
volume and candle volume, it does qualify on other
parameters that we have studied. Now along with Indu Ind Bank I would hence select
ICICI Bank as well. Now let me take up
Kotak Bank as well. Now after some consolidation
Kotak Bank did move up but chart is not clean
as one would expect. Now open interest
trend is not supportive and most of the times
open interest trend is flat and is trending down. Downward volatility
cycle has ended and volatility is
now in a range. Kotak Bank hence does
not qualify on clean
trending charts, standard volume, candle
volume, open interest and volatility cycle, hence I
would give this stock a pass. Now these are the
seven broad criterias we saw for selecting stocks
for intraday trading. Out of the six
stocks we considered, I have shown how ICICI Bank and Indus Ind Bank
qualifies for most. If you look at volumes
Indus Ind Bank qualifies whereas ICICI does not. When it comes to open
interest, volatility, price, trend and
relative strength both these stocks qualify. When it comes to recent
demand and supply Indus Ind Bank qualifies while in the 52-week
high, low criteria only ICICI Bank qualifies. The key here is to select
stocks which qualify on as many parameters
as possible. If you see I have
not included news and earning seasons
for stock selection and the main reason here
is that both these events eliminate the element
of consistency with which you
should select stocks. It is much better to follow
a consistent framework for entire year than to
wait for specific events where at times one cannot match the might of
institutional traders. Let me now come to
using rollover data as a filter in stock selection. In simple terms rollover
is carrying forward a particular month’s future
positions to the next month. This is done by closing the
existing futures position for the current month
and simultaneously taking a similar position
in the next series. Ideally traders roll the
position in the last week of the expiry series
typically on the expiry day. Now the important question is why traders rollover
in futures market? Well there are two
main reasons for it, number one traders
expect the current trend to continue in the near future. And number two, traders are
not willing to book losses and expect trend to reverse. In either case if
you see movement is something traders anticipate and this is where
an intraday trader can benefit a great deal. Let me now show you how to use rollover data
to shortlist stocks. The first thing you will require is to organize rollover data
for the last six months. Let me know in the
comment section if you want some resources
on how to get this. Now once you have this data look at the current
month rollover percentage and see if it is
greater than 10 to 20% of six month average. If you indeed spot this
then mark those stocks as high probability stocks
for the next series. So this is a very simple way where you can use rollover
data on your existing watchlist to identify high
probability stocks. Let me now come to
one more bonus step that is gaps that can be used as an effective filter
for stock selection. Now bullish gaps form on chart when there is no
trading activity between high of previous candle
and low of current candle. Bearish gaps form on a chart when there is no
trading activity between low of previous candle
and high of current candle. Now gaps can be used to
shortlist stocks provided they fulfill most of
the criterias laid out in the seven steps we have seen. If you skip those criterias, you would be chasing all stocks
which gap up or gap down. This will reduce odds of
profit in intraday trading. Always remember that
you need to eliminate any form of inconsistency when
it comes to stock selection. This means you will have to
do tremendous amount of work before the market begins. If you follow a consistent
framework to short list stocks in the long run this will
benefit you a great deal. Now with respect to gap
trading I will be covering more on this when I start
the intraday strategy section from the next part. I will now show you how
to use pre-market time to select stocks and
I will also clear some of the misconceptions
associated with it. Let me now come to
pre-market timings and some of the misconceptions
associated with this. Now pre market
does not mean time between 9:00 a.m and 9:15 a.m. Pre-market means
the time you have before market opens the next day and next week when
it comes to weekend. This is where you will do maximum amount of
research and hard work. You need to focus on having
a tremendous work ethic to analyze stocks with
respect to intraday trading way before the market opens. This is something most
traders don’t realize. Once trading day starts
during pre-market target only those
stocks which show price and volume movement and
which are in your watchlist. Let other stocks pass. Now your success in intraday depends on what you do hours
before the market opens. Therefore focus on these
seven steps and guidelines to do all the required works
so that you are ready next day with a clear actionable plan. So kindly consider
hitting the like button and sharing this video if
you find the content useful. Thanks a lot for
watching this video guys, take care and be safe.

52 Replies to “Stock Selection For Day Trading In 7 Simple Steps – Intraday Trading Strategies 🔥🔥”

  1. Intraday Trading Playlist

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    Thanks For Watching Guys. Tc & Be Safe.

    0:01 Introduction To 7 Simple Steps For Stock Selection.

    11:27 Stock Selection For Day Trading – Case Studies

    19:14 Using Rollover Data & Gaps As Stock Selection Criteria.

    If you like the content, kindly hit the like button and do share the video.

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  2. Hi,

    1) How to get the OI chart for stocks which you showed in the video?
    2) Should the Historical Volatility be expanding even for short position?

  3. Evening Good Sir! Was just wondering if the ATR/ADR could be used as an decent alternative to the Historical volatility indicator you mention in this video? As always, thanks ever so much for your content.

  4. Excellent , never seen such informatic and details video. Pls upload video for btst/positional future stock.

  5. Excellent is the only word.. Even highly charging training sessions and seminars dont give such an excellent presentation.. 👌 thoroughly benefitted.. Thanks a lot..

  6. sir pls do a video on how u to use charts on trading view for the things shown in the video and also on roll over data

  7. which technical analysis software or web based application do you use to analysis the stocks the way u do

  8. Hi ST.. Whenever we speak about considering Volatility do we consider the past volatility or only the intraday volatility. Secondly do we give a thought to VIX also..

  9. Would like to know your observations regarding stock behaviour in the pre opening hour and during actual market hours..Is there any possibility to trade the stocks based on their pre market levels..Losing or gaining status

  10. Very informative. would have loved to know where & how to see all the mentioned indicators, volatility, open interest in this same vid. Would appreciate your help.

  11. Can you please let me know historical voltaliy settings for field, period, days per year & standard deviations

  12. Sir thanks a ton for such a informative session, just found out from the comment that rollover data will be available from the but sir can u please tell us how you make them in simple graphical form like of your ,that would be a great help …..

  13. Hi…A few queries…
    1) Near 52 week high/low – how much near (%) to high/low should be considered?
    2) If a stock is trading below/above 200 DMA for more than 2-3 months….can we consider that as a trending stock?
    3) For how many days should the historical volatility be trending upwards?

  14. one of the best video on stock selection,,,thanx a ton…actually m not getting the historical volatility code for trading view,,,can you please help me out on this,,

  15. Thanks sir.. very nicely explained.. Few doubts sir… Where can v get the average volume line on the volume underlay? is it available on zerodha?
    how can v get the open interest trends?
    The RS which u have explained is the same of RSI..?
    plz explain sir…
    Thanks in advance..

  16. Another insightful video! Appreciate the effort and amazing work behind it.
    However, I have a question regarding the volume indicator: Would there be a difference if we were to use a 20day volume MA instead of 100days? Also, would the stock selection strategy in entirety be applicable to trading the S&P 500 ?

  17. Dear Sir , Very nice and in depth explanation of Intraday. You put great efforts to give detailed learning in the topic which not available nowhere find in YouTube.  Request give idea about how to get  Volume Chart, OI DATA, CANDLES VOLUME CHART.

  18. Thanks for the videos. I have few doubts regarding the marking the OI for current month and next month in the last week of Expiry. What is the ideal day to mark it from Monday to Thrusday. Second one on 08/23/2019 BankNifty is near -350 points down and change in Futures OI is 14.5% but price recovered from 26500 to 27100. How to identify the trend, generally chance of thinking shorts of 14.5% added but even when Bank nifty raised. Closing Futures Bank Nifty OI is -4.5%. Please provide any video link is there also. Thanks

  19. As per the teaching Volume data to be used with 100D MA. But in what time range.?
    1D time period with 100D MA Volume will differ for 1W,1M time period.
    Please elaborate on the same !

  20. Hello,I have a Query. But before that I went through Complete Intraday playlist this Weekend. Hats off to your representation and your sincerity. I took much help from SIP series and started that. Now I really wish that i could be able to generate income and be full time trader slowly.
    Query is
    You mentioned keep 10-15 stocks through Primary and Secondary list. You also mentioned unless you narrow down your watch list, your learning curve will never reduce.
    Then in step 4 you mentioned only focus on stocks that are near 52 week high or low . but these will change over period of time.
    Please clear the doubt.

  21. Thank u, sir.All your videos are for only serious learners.What makes more interesting is use of graphs and diagrams in your videos…please use realtime data or diagrams if possible sir..

  22. Excellent , wonderful ppts and easy to understand explanation , just by watching your videos no one needs to join any class

  23. I tried to to get your email addres and DM on twitter.But couldn't find your email ID ,also not able to DM to you on twitter.

    My query is how to add the 100 Moving Average in Volume chart.? Usually the Moving Average can be added only on the Candlesticks,not the volume chart.So please help me.

  24. First of all thanks, dude. Your videos are good..Kindly reply 1)where can I get open interest trend? 2) Are you watching on a daily time frame? 3) Relative strength means RSI (relative strength index)?

  25. Very informative and well presented video. Will you suggest to trade stocks only in Nifty 50 or other stocks as well for intraday. Also should we filter stocks based on price e.g. not trading stocks below Rs. 200 or stock priced greater than Rs. 2000 etc. I already filter stocks based on daily turnover and do not trade stocks which have a relatively low turnover.

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