Find Volatile Day Trading Stocks Using These Filters

Big Moves Mean Big Potential; Here Are Ways to Find the Action

how to find volatile day trading stocks
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Day traders often choose to trade high-volume stocks that are seeing significant price movement. Which stocks are seeing lots of movement may change from day to day, therefore a system is required in order to find them. Narrowing down the universe of potential day trading stocks requires a stock screener or stock filter. This is an automated program or website that produces a list of stocks that meet certain criteria.

Here are several ways to find volatile stocks for day trading. 

Constantly Volatile Stocks

If you want to trade volatile stocks with minimal research, run the following criteria on a stock screener each week. Pick two or three stocks from the list and trade them for the week. On the weekend, run the screen again. Repeat this process each week/weekend.

Using the screener on StockFetcher.com works best for this one:

show stocks where the average day range (50) is above 5%
and price is between $10 and $100
and average volume (30) is greater than 4000000
and exchange is not Amex
add column average volume (30)
add column average day range (50)

Create a new filter on StockFetcher.com (it's free) and copy and paste the above into the Customize field. Click Fetch Stocks! to see your list. The free version of the software only produces five results, but you only want to pick two or three from the list anyway, so the free version of the software should suffice for most day traders.

 

Here's what the above filter means, and the type of stocks it will produce:

  • The stocks typically move more than 5 percent per day, based on a 100-day average. Use 100, 75, or 50 here, because it shows that the stock has moved a lot, with regularity, over an extended time frame.
  • Stocks are priced between $10 and $100. Alter this to suit your preference.
  • High volume—average volume over the last 30 days for each stock is above four million shares per day.
  • "Exchange is not Amex" is added to eliminate leverage ETFs from the results (delete this criterion if you want to trade ETFs).
  • The "add column" commands allow you to see which stocks have the biggest moves and volume. Click on these columns—on one of the search results—to rank the results from highest to lowest based on these criteria.

Adjust any of the criteria to get a list of stocks that are more suited to your day trading strategy or specifications.

Daily Monitoring for Stocks With Biggest Moves

Another approach is to monitor for stocks that are likely to move big each day. Construct a list of stocks at night to watch the next day. The list may comprise stocks that were very volatile during the prior trading session or had the biggest percentage gains or the biggest percentage losses. Add in volume criteria to make sure the stocks have enough volume each day for day trading: generally at least one million shares or more.

Inputting any of the data above can quickly be done on Finviz.com, another free stock screener. Click the Screener tab, and from the Signal list, select Most Volatile, Top Gainers, or Top Losers.

Under the Filters, select Over 1M for Average Volume. To avoid including ETFs in the list, under Industry, select Stocks Only. ​​ Increase the volume criteria to reduce the number of stocks on the list. 

Also, each night or morning, note which well-known stocks—generally those with good volume—have earnings releases due out. Earnings releases, or planned company events, often cause big price moves. Wait until after the news is released to day trade the stock; that is when the volatility occurs and when day traders can potentially capitalize. An Earnings Calendar can be found on Yahoo! Finance that gives a list of companies releasing earnings each day.

These approaches will produce a significant number of stocks, requiring you to manually narrow down the list to a handful you want to watch and potentially trade the next day.

Monitor Volatile Stocks Intraday

An alternative is to do some research during the day to find the stocks that are moving the most. One approach is to monitor the Most Volatile, Top Gainers, or Top Losers on Finviz.com or on a number of other trading sites such as Finance.Yahoo.com, Nasdaq.com, or TradingView.com. Most brokers and trading platforms will also provide this information in real-time.

Note changes in the list throughout the day. If a stock opens down 10 percent and stays there, there isn't any day trading action happening. But if a stock opens down 10 percent and then you notice it down 11 percent, 12 percent, 13 percent (or it starts moving up), that stock is moving, and may be worth taking a look at for a trade. Sites like Finviz also provide a list of stocks breaking resistance levels and out of chart patterns. With a paid subscription, you can monitor for these intraday charts and breakouts in real-time.