How to Make Money Daytrading the Stock Market
- 1
Price volatility can be seen visually on a price chart.stock market analysis screenshot image by .shock from Fotolia.com
Look up the price chart for the stock. Visually, volatility is shown by the sharp up and down angles on a stock price chart. The sharper the angles, the higher the volatility. You can look this up on your favorite investment research site such as Google Finance, Yahoo! Finance, or MSN Money; you can call the Investor Relations Department for the company to request a price chart; you can go to to the company's website to check for investor presentations; or, you can contact your stock broker. As a day trader you are primarily concerned with daily price charts. - 2). Obtain the beta for the company. Beta is a measure of volatility and can be used in the same way as the price chart is used -- to find companies with highly volatile stock pricing. You can also obtain the beta for the company from investment research websites, the company website, company Investor Relations or your stock broker. The further the beta is away from 0, the more volatile the stock.
- 3). Select three highly-volatile stocks in terms of beta as well as their price charts. Beta can help to find the stocks, but the price charts allow you to study stock patters.
- 4). Track these stocks over one month. Look for daily patterns in the price chart. Patterns may emerge in early morning trading hours or after market news. See if you can predict the price movements before they occur.
- 5). Make buy or sell decisions based on daily highs and lows in the stock. Since you've been tracking the stock over the past month, you know the natural support (bottom) and resistance (top) levels of the price chart. Buy the stock when it hits a bottom and sell the stock when it hits a top.
