Best day trading stocks

Day trading is tempting, but it’s a path paved with risks as much as it is with potential rewards. Traders may use options and futures contracts to capitalise on market mood swings in volatile sectors. Yet the risks are real and substantial, from rapid market fluctuations to the complexities of leverage, which can magnify both gains and losses.

Equipping yourself with tools like stop-loss orders can help manage the risks, but traders need to tread cautiously. Keep reading for a quick-and-dirty guide to the world of day trading.

The best day trading stocks

Day traders target stocks with high volatility. If a stock is highly volatile, it means that its price fluctuates significantly over a short period. This is attractive for day traders as it presents opportunities to profit from these price movements. The best shares to buy now for day trading may be different tomorrow.

Below is a list of the highest volatility stocks at the start of 2024. This compilation is based on MarketScreener’s volatility index, focusing on global stocks with a market capitalisation of $100 million or more. For the most current information and a comprehensive list of these stocks, you can refer to MarketScreener’s website or similar financial information platforms.

Stock	Icon	1-year performance (to Apr. '25)	5-year performance (to Apr. '25)	Link
NVIDIA Corporation (NVDA)		18.71%	309.09%	Invest Capital at risk
Tesla (TSLA)		44.56%	32.15%	Invest Capital at risk
Oracle Corporation (ORCL)		8.20%	150.75%	Invest Capital at risk
Costco Wholesale Corp (COST)		31.67%	221.43%	Invest Capital at risk
Lam Research Corp (LRCX)		-32.45%	157.20%	Invest Capital at risk
Intuitive Surgical (ISRG)		24.79%	191.50%	Invest Capital at risk
American Express Company (AXP)		13.15%	160.38%	Invest Capital at risk
Pfizer (PFE)		-18.03%	-38.90%	Invest Capital at risk
Intel Corporation (INTC)		-47.17%	-65.21%	Invest Capital at risk
Alibaba Group Holding Ltd (BABA)		39.19%	-46.95%	Invest Capital at risk

What is day trading?

Day trading is essentially buying and selling stocks (or other assets) within a single trading day. The goal? To profit from short-term price changes in the market. Here’s a breakdown of some key terms and concepts:

• Leverage. This is like borrowing money to invest. It can help you make bigger trades, but it’s risky because losses can also be amplified.
• Derivatives. These are complex financial contracts based on the value of other assets, like stocks. They’re not beginner-friendly and include things like options and futures.
• Options. These give you the right to buy or sell a stock at a set price, by a certain date. They’re a way to bet on where you think the stock price is heading.
• Futures. Similar to options, but with futures, you’re agreeing to buy or sell the asset at a future date for a specific price. It’s like a promise to make a trade in the future.
• Stop-loss orders. These are a trader’s best friend. This is a type of trading order that instructs your broker to automatically sell a stock once it hits a certain price. It means you can go and make a coffee without fear of a sudden drop wiping you out.

Day trading is fast-paced and not for the faint-hearted. It requires keeping a close eye on the markets, making quick decisions, and understanding complex financial products.

To start day trading, you’ll want to make sure your broker allows you to use leverage, trade derivatives, and engage in options and futures trading. All of which can be pretty risky.

How to choose stocks for day trading

Selecting the right stocks is crucial for day trading success. Day traders usually look for stocks with the following characteristics:

• Liquidity. This is the ability to buy or sell an asset quickly. It’s measured by the “average daily trading volume”. The higher the volume, the more liquid the stock. High liquidity is important because it ensures traders can enter and exit positions easily, reducing the risk of “slippage” (the difference between the expected price of a trade and the actual price).
• Volatility. This refers to the degree to which the stock price fluctuates over a given period. It can be measured by looking up the stock’s “beta” metric; the higher the beta, the more volatile the stock. High volatility is sought after because it can offer more opportunities for profit as prices move more dramatically within a short period, though it also increases risk.
• Hot sector. This is a sector experiencing significant attention and growth. In recent times, those have included artificial intelligence (AI), semiconductors, and climate change stocks. Stocks in hot sectors can have greater momentum and potential for short-term gains due to increased investor interest and industry growth.
• In the news. These are the stocks everyone’s talking about on any given day. That could be because the company has an earnings call coming up, the CEO has resigned, or a new product has been launched – the possible reasons are endless. What matters to day traders is trying to get ahead of the markets in predicting how a given revelation will affect the stock price.

How to get started

1. Open a share trading account. The first step on your day trading journey will be choosing and opening a share dealing account. Use a stocks and shares ISA wrapper if possible.
2. Fund your account. Once your account is set up, deposit funds. You can do that via a bank transfe or debit card (or any other means supported by your chosen platform).
3. Research and choose stocks. Research the best stocks then search them up in your trading platform using the company name or ticker symbol.
4. Buy shares. Once you’ve found the stock(s), select the amount you want to invest and create an order to buy shares.
5. Monitor your portfolio. And just like that, you’re now officially an investor. You may want to explore automated order types so that you don’t have to spend the rest of your life watching each stock’s hour-by-hour performance!

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Day trading vs. investing

While investing focuses on long-term growth and stability, day trading is all about short-term gains from quick market movements.

Investors typically hold stocks for years, collecting dividends and waiting patiently for the stock price to edge up. Day traders, on the other hand, buy and sell within the same day to exploit immediate price fluctuations.

Day trading requires constant market monitoring and carries higher risk. Traditional investing is generally steadier and less time-intensive.

Should you start day trading?

Thinking about day trading? It’s an exciting way to make quick profits, but it’s also risky. You need to be smart about the stock market and ready to make fast decisions.

Remember, only use money you can afford to lose, because gains and losses can happen quickly. If you’re up for the challenge and willing to learn, day trading can be rewarding.

Just keep it simple, be aware of the risks, and maybe get some advice from financial pros. Also, keep in mind that your time has an opportunity cost. Are you really making more by day trading than you would at your 9 to 5 or in a side hustle?

Expert comment - What’s the best way for beginners to start day trading?

George Sweeney

Deputy editor

This largely depends on whether you’re a beginner to day trading, or if investing in general is new to you. Typically, day trading is an activity reserved for experienced investors who already have a deep understanding of investments and the markets.

Many beginners make the mistake of diving into something like day trading without learning some investing fundamentals. Day trading can be much riskier and difficult to learn. It's well worth spending some time to educate yourself around long-term investing before you even consider jumping into this area, where you’re far more likely to lose money.

Pros and cons

Bottom line

Day trading offers a chance for profit through fast-paced stock market movements. It’s engaging and educational, but also comes with high risks and emotional stress. While it might be ideal if you can manage the volatility and are ready for a challenge, you should never trade with money you can’t afford to lose.

Before diving into day trading, consider whether traditional, buy-and-hold investing might deliver you the same or even greater returns for much less effort. Also, keep in mind that every hour you spend day trading is time you could spend making income at your 9 to 5, or doing a side hustle.

Frequently asked questions

• Can you make money day trading?

  Yes, you can make money day trading, especially if you're well-informed and quick with your decisions. Of course, you can also lose all of your investment, and any money you do make comes at the cost of your time spent reading the news and poring over charts.

• How much money can you make day trading?

  The amount you can make from day trading varies widely. It depends largely on how much you invest, how much leverage you use, and how successful your stock picks are.

• How much do you need to get started day trading?

  Many brokers set a very low minimum deposit requirement, meaning you can get started with as little as £10.

To make sure you get accurate and helpful information, this guide has been edited by George Sweeney, DipFA as part of our fact-checking process.

Written by

Mark Tovey

Writer

Mark is a freelance journalist whose work has been published in The Motley Fool and The Guardian, among other sites. He's worked as a data journalist and has a BA in Economics from the University of Sussex as well as an NCTJ journalism qualification. See full bio