How to choose stocks for day trading

Estimated read time 4 min read

Day trading has become a popular way to make money in the stock market, especially in Singapore. But with so many stocks available, it can take time to determine which ones are best for day trading. This article will provide tips on how to choose stocks for day trading in Singapore and discuss the benefits of doing so. In addition, it will give insight into what risks traders should consider to ensure they make the most out of their investments.

Research the markets

When selecting stocks for day trading, it is essential to research Singapore’s various markets. It includes researching the different types of stocks available such as blue-chip stocks, penny stocks, and more. Researching these different markets will help traders determine which type of stock best suits their investment goals. Research can also provide valuable insight into how specific sectors perform to better inform decisions.

Analyse financial statements

Traders should always take the time to analyse a company’s financial statements before investing in its stock. A detailed analysis can provide information on the company’s assets and liabilities, its operational performance, and potential growth prospects. By analysing a company’s financial statements, traders can better understand its financial health and, thus, the investment potential. Moreover, doing so can help traders identify warning signs indicating a riskier investment.

Look at technical indicators

When analysing a stock, traders use technical indicators to get an idea of how it is performing in the market. Technical indicators such as price patterns, moving averages, and oscillators can provide insight into a stock’s current performance. By looking at these indicators, traders can make more informed decisions on when to buy or sell a particular stock. Furthermore, looking at technical indicators can also help traders identify warning signs indicating a riskier investment.

Monitor news and events

News and events related to certain stocks can significantly impact their prices. Therefore, day traders must monitor news sources such as newspapers, websites, and television programs to stay up to date with the latest financial news. It will help traders stay ahead of the market and decide which stocks to buy or sell. Additionally, monitoring news and events can provide insight into the current market sentiment to better inform decisions.

Utilise trading platforms

To take advantage of day trading opportunities, traders must use a reliable online platform. A good platform can provide access to real-time data, analysis tools, charting capabilities, and more. By utilising these features, traders can quickly identify potential investments and capitalise on them. Moreover, a reliable trading platform can help traders protect their investments by providing access to advanced risk management tools.

Day trading risks

While there are several benefits of day trading, traders should be aware of the potential risks. Day trading requires quick decision-making and can involve large amounts of money, making it a high-risk activity. Therefore, traders should be aware of the potential risks involved and ensure they make well-informed decisions.

Market volatility

The market is unpredictable and volatile, making it difficult for traders to anticipate fluctuations. Those new to day trading may want to consider taking a more conservative approach to reduce the risk of losses from large price swings.


Day trading often involves using leverage, which increases the risk involved. Leverage can increase your trading position and losses, so traders should use caution when investing with borrowed money.


Trading commissions and other fees can add up quickly and cut into your funds if not carefully managed. Therefore, it is wise for traders to compare different brokers and find one that offers competitive rates.


Day trading requires quick decision-making, which can be difficult if a stock’s liquidity is low. Low-liquidity stocks can move erratically and quickly become illiquid due to their limited trading volume. Therefore, traders should be wary of investing in these types of stocks as they may be hard to exit when needed.

Emotional trading

Traders should be aware of the potential for emotional trading and remain disciplined. Many traders may feel tempted to take risks to make a quick trade, but this could result in significant losses. Therefore, it is crucial to develop a strategy and stick to it.

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