KAKAO stock forum
1. Liquidity
* Why it matters: Liquidity ensures you can enter and exit positions quickly without significantly affecting the stock's price.
* What to look for:
* High average daily trading volume (e.g., 1 million+ shares traded per day).
* Tight bid-ask spreads (the difference between the buying and selling price).
2. Volatility
* Why it matters: Volatility creates price movements, which are essential for day trading opportunities.
* What to look for:
* Stocks with significant intraday price swings (e.g., 3-5% or more).
* Use tools like Average True Range (ATR) to measure volatility or look at the daily price movement over the past few weeks
3. Sector and Market Trends
* Why it matters: Stocks in certain sectors can be more volatile or have bigger price movements during the day due to news or earnings reports.
* What to look for:
* Stocks in sectors that are currently trending (e.g., tech, energy, or healthcare).
* Focus on stocks in sectors with frequent news catalysts, like technology, biotech, or energy. Be aware of any upcoming announcements, earnings reports, or macroeconomic factors that could impact the sector.
4. Recent News or Events
* Why it matters: News events can significantly affect stock prices. Stocks with recent earnings reports, product launches, or other market-moving news are worth considering.
* How to assess: Stay informed by reading news sources, press releases, and company announcements. Stocks that react strongly to news can offer day trading opportunities.
* Be cautious of gap-ups or gap-downs at market open, as they can lead to unpredictable price action.
5. Float and Market Cap
* Why it matters: Stocks with a smaller float (shares available for trading) and lower market cap tend to be more volatile.
* What to look for:
* Low-float stocks (e.g., under 50 million shares) can experience rapid price movements.
* Small to mid-cap stocks are often more volatile than large-cap stocks.
6. Pre-Market and After-Hours Activity
* Why it matters: Pre-market and after-hours trading can indicate how a stock will perform during regular trading hours.
* What to look for:
* Unusual volume or price movements outside regular hours.
* News releases or earnings reports that could impact the stock.
7. Order Flow
* Why it matters: Day traders often use Level 2 data (the order book) to gauge market sentiment and price direction. This shows you real-time buying and selling pressure.
* How to assess: Look for stocks with strong order flow (larger buy or sell orders) as this indicates momentum.
8. Avoid Low-Float Stocks
* Why it matters: Low-float stocks (those with a small number of shares outstanding) can have dramatic price swings and can be manipulated more easily.
* How to assess: Check the float of a stock before considering it. Stocks with a float under 10 million shares tend to be riskier for day traders.
Example of a Good Day Trading Stock:
* High volume (e.g., 5 million+ shares traded daily).
* Volatile (e.g., average daily price movement of 3-5%).
* Trending (e.g., part of a hot sector like AI or renewable energy).
* Catalyst (e.g., recent earnings report or news event).
* Why it matters: Liquidity ensures you can enter and exit positions quickly without significantly affecting the stock's price.
* What to look for:
* High average daily trading volume (e.g., 1 million+ shares traded per day).
* Tight bid-ask spreads (the difference between the buying and selling price).
2. Volatility
* Why it matters: Volatility creates price movements, which are essential for day trading opportunities.
* What to look for:
* Stocks with significant intraday price swings (e.g., 3-5% or more).
* Use tools like Average True Range (ATR) to measure volatility or look at the daily price movement over the past few weeks
3. Sector and Market Trends
* Why it matters: Stocks in certain sectors can be more volatile or have bigger price movements during the day due to news or earnings reports.
* What to look for:
* Stocks in sectors that are currently trending (e.g., tech, energy, or healthcare).
* Focus on stocks in sectors with frequent news catalysts, like technology, biotech, or energy. Be aware of any upcoming announcements, earnings reports, or macroeconomic factors that could impact the sector.
4. Recent News or Events
* Why it matters: News events can significantly affect stock prices. Stocks with recent earnings reports, product launches, or other market-moving news are worth considering.
* How to assess: Stay informed by reading news sources, press releases, and company announcements. Stocks that react strongly to news can offer day trading opportunities.
* Be cautious of gap-ups or gap-downs at market open, as they can lead to unpredictable price action.
5. Float and Market Cap
* Why it matters: Stocks with a smaller float (shares available for trading) and lower market cap tend to be more volatile.
* What to look for:
* Low-float stocks (e.g., under 50 million shares) can experience rapid price movements.
* Small to mid-cap stocks are often more volatile than large-cap stocks.
6. Pre-Market and After-Hours Activity
* Why it matters: Pre-market and after-hours trading can indicate how a stock will perform during regular trading hours.
* What to look for:
* Unusual volume or price movements outside regular hours.
* News releases or earnings reports that could impact the stock.
7. Order Flow
* Why it matters: Day traders often use Level 2 data (the order book) to gauge market sentiment and price direction. This shows you real-time buying and selling pressure.
* How to assess: Look for stocks with strong order flow (larger buy or sell orders) as this indicates momentum.
8. Avoid Low-Float Stocks
* Why it matters: Low-float stocks (those with a small number of shares outstanding) can have dramatic price swings and can be manipulated more easily.
* How to assess: Check the float of a stock before considering it. Stocks with a float under 10 million shares tend to be riskier for day traders.
Example of a Good Day Trading Stock:
* High volume (e.g., 5 million+ shares traded daily).
* Volatile (e.g., average daily price movement of 3-5%).
* Trending (e.g., part of a hot sector like AI or renewable energy).
* Catalyst (e.g., recent earnings report or news event).