Finding High-Volatility Stocks to Day Trade

Checking stock prices on a smartphone and on a computer.
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Day traders often focus on high-volume stocks that are seeing significant price movements, because those stocks offer the best opportunities for making money in a matter of hours, minutes, or even seconds. You can use an online stock screener to find stocks that meet those and other criteria.

You can use screeners in different ways to find stocks that fit your trading needs. For example, you can find stocks that often experience lots of price volatility on high trading volume, ones that are likely to be volatile and highly traded on a particular day, or ones that are showing volatility during a certain time of day.

Key Takeaways

  • High-volatility stocks are popular with day traders because they offer the opportunity to make money in a matter of hours, minutes, or seconds.
  • You can find regularly volatile stocks by using a stock screener such as StockFetcher to help you search.
  • You can also do some research in the middle of the trading session to find the stocks that are moving the most that day.

Searching for Regularly Volatile Stocks

To search for stocks that routinely display high volatility and heavy trading volumes, go to StockFetcher or another screener of your choice. If you're on StockFetcher, click "New Filter" and copy and paste the following lines into the pale-yellow area:

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
add column average volume (30)
add column average day range (50)

Once you have entered in each line, click "Fetch Stocks!" to get your results. You can see the first five stock results for free. The results will also be delayed by a day. To see more than five results and access data from the most recent trading day, you can pay for a subscription.

Those criteria will generate a list of stocks that:

  • Typically move more than 5% per day, based on a 50-day average—you can use any time frame you want, but a 50-day average or more will help you find stocks that have moved significantly, and with regularity, over an extended time frame
  • Are priced between $10 and $100—you can alter those amounts to suit your preferences
  • Had average daily trading volume of more than 4 million during the past 30 days
  • Are individual stocks, not leveraged ETFs

The "add column" commands enable you to see at a glance which stocks had the biggest average trading ranges and volumes.

Run that search on a stock screener each weekend. Pick two or three stocks from the list, and trade them for the week. Repeat the process, and note your successes and failures. You can customize many aspects of your search, so adjust any of the criteria as needed to get a list of stocks that are better suited to your day trading strategy or specifications.

Analyzing Stocks Daily

Another approach is to monitor for stocks that are likely to move significantly each day. You can do this by using a stock screener or by paying attention to news events like earnings reports.

Finding Daily Opportunities With a Stock Screener

Look for stocks that were volatile during the prior trading session or had the biggest percentage gains or losses. Add in a volume filter to make sure the stocks are suitable for day trading—day traders generally look for stocks that have at least one million shares traded daily.

For example, you can set up that search easily on FINVIZ, another free stock screener. Click the "Screener" tab. Select "Most Volatile," "Top Gainers," or "Top Losers" from the "Signal" drop-down menu. The filter options should automatically display, but if they don't, click the arrow next to "Filters." Then, you can set the "Average Volume" filter to more than 1 million ("Over 1M"). If you want to exclude ETFs, you can specify this in the "Industry" filter ("Stocks only (ex-Funds)"). If you get too many results (and you probably will), increase the average volume level to reduce the number of stocks in your list of results.

Earnings Calendars Offer Day Trading Opportunities

Aside from using stock screeners, you might also want to check each morning to see whether any well-known stocks have earnings releases due out. Announcements about a company's quarterly profits or losses often cause big price moves. Be prepared to trade as soon as the news is announced; that's when the most volatility occurs, and day traders can potentially capitalize on that volatility. Yahoo! Finance's earnings calendar lists the companies scheduled to release their financial results on any given day.

Both of these approaches will produce a significant number of stocks. You'll have to narrow down the list to a handful of stocks you can manage to watch (and potentially trade) that day.

Monitoring Intraday Volatility

Another day trading method is to do some research in the middle of the trading session to find the stocks that are moving the most that day. You can do this by using volatility and top gainers/top losers filters on stock screeners like FINVIZ or TradingView. Most brokers and trading platforms will also provide this information in real time.

Watch for changes in the list throughout the day. If a stock opens down 10% and stays there, it doesn't provide much opportunity for day traders. However, if a stock opens down 10% and then moves in one direction or the other, it may be worth trading.

You can also use stock screeners to check for stocks that are breaking through resistance levels or sending another technical trading signal. With a paid subscription, you can follow these intraday signals in real time.

Frequently Asked Questions (FAQs)

What stocks should you invest in when the US market is volatile?

Investors who want to protect themselves from volatile or down-trending markets should emphasize strong fundamental investments. When a company has a strong balance sheet, consistent earnings, and a relevant business model, then short-term volatility shouldn't be as much of a concern.

During which months are stocks most volatile?

October is typically the most volatile month of the year for the stock market.

What are good moving averages to use with highly volatile stocks?

The best moving average for volatile stocks depends on your trading strategy. If you're a day trader hoping to capitalize on swift changes, then you'll want a shorter moving average that's more sensitive to the most recent price action. If you're trying to cut through the volatility and find good long-term investments during volatile times, you might want to use a longer moving average that smoothes out short-term volatility.