Day trading involves buying and selling financial instruments within the same trading day with the goal of profiting from short-term price movements. While highly risky, day trading can be lucrative for experienced traders who are adept at identifying opportunities and managing risks.
For 2024, certain stocks appear well-positioned for day trading profits due to their volatility, liquidity, and potential catalysts. Here are 10 stocks primed for day trading profits to consider for your day trading watchlist this year:
1. Tesla (TSLA)
As the leading manufacturer of electric vehicles (EVs) globally, Tesla has seen tremendous stock price swings over the years. This volatility is attractive for day traders looking to profit from both up and down price movements.
Tesla stock has an average daily trading volume of over 100 million shares, providing ample liquidity for entering and exiting positions quickly. The company frequently makes market-moving announcements related to production, new models, and earnings results.
With Tesla expanding into new markets and facing competition from other EV makers in 2024, the anticipation of major news events will likely drive continued volatility.
2. Nvidia (NVDA)
Nvidia is a leading designer of graphics processing units (GPUs) that power gaming, professional visualization, data centers, and automotive systems. As a key player in cutting-edge technologies like artificial intelligence and the metaverse, Nvidia stock is prone to large price swings on product announcements and shifts in market sentiment.
With an average volume of over 40 million shares per day, NVDA offers day traders high liquidity. The stock has a beta of 1.72, indicating it is significantly more volatile than the overall market.
Major events for Nvidia this year include new product launches, metaverse partnerships, and its acquisition of chip designer Arm. These catalysts present opportunities for day traders.
3. Advanced Micro Devices (AMD)
As a top maker of microprocessors and GPUs, Advanced Micro Devices (AMD) competes directly with Intel and Nvidia. AMD stock is well-suited for day trading, with an average daily volume exceeding 60 million shares.
The company has a history of making bold strategic moves under CEO Lisa Su, like acquiring Xilinx and Pensando last year. With a packed product roadmap for 2024, AMD’s stock price could see large swings on any major announcements.
AMD has a beta of 1.95, making it almost twice as volatile as the broader market. Day traders can capitalize on this volatility around events like new product launches, earnings reports, and competitive developments.
4. Netflix (NFLX)
As the pioneer of video streaming, Netflix has seen tremendous growth as well as stock price volatility. NFLX shares have an average daily volume of 8 million.
After losing subscribers in 2022 amid increased competition, Netflix is poised for new initiatives this year, like an ad-supported tier and crackdowns on password sharing. The company’s subscriber growth and content pipeline will drive stock volatility in 2024.
With a beta of 1.28, NFLX offers day traders above-average volatility. Earnings reports, subscription updates, and buzz around hit shows present opportunities to trade the stock.
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5. Meta Platforms (META)
Formerly known as Facebook, Meta Platforms operates the world’s largest social media platforms along with growing metaverse ambitions. META is a leading stock for day trading, with an average volume of over 30 million shares per day.
Meta faces uncertainty this year as it presses forward with CEO Mark Zuckerberg’s expensive metaverse vision while contending with rivals like TikTok. With a beta of 1.76, Meta’s stock price can see major swings on news related to advertising, users, regulation, and metaverse traction.
Earnings reports, product announcements, and leaked company information have led to volatile trading days for META. Savvy day traders are poised to profit from these swings.
6. Shopify (SHOP)
As a leading e-commerce platform for businesses, Shopify has been a top pandemic winner. However, SHOP stock declined 75% in 2022 amid post-COVID economic normalization. With an average volume of 29 million shares, Shopify offers day traders substantial liquidity.
Shopify faces growth challenges this year, but its stock could rally on signs of e-commerce acceleration or new initiatives like expanding internationally. The stock has a beta of 1.91, indicating proneness to large daily price swings.
Quarterly earnings releases, product updates, macroeconomic factors, and analyst calls on Shopify’s growth outlook present key trading opportunities.
7. DraftKings (DKNG)
DraftKings operates an online hub for sports betting and daily fantasy sports contests. As more U.S. states legalize online gambling, DraftKings has major growth potential despite recent stock declines.
With an average volume exceeding 14 million shares per day, DKNG provides excellent liquidity for day traders. Its stock is also highly volatile, with a beta of 2.17.
Earnings reports, state legalization announcements, marketplace data, and unique pop culture tie-ins (like crypto and sports deals) can all catalyze big stock moves that day traders can capitalize on.
8. Lucid Group (LCID)
Electric vehicle manufacturer Lucid Group went public via a SPAC deal in 2021. LCID has been volatile since then as the startup ramps up production. With an average trading volume of over 22 million shares, Lucid stock offers day traders solid liquidity.
Lucid faces risks as it tries to scale up manufacturing this year after lowering its 2022 production outlook. However, LCID could also surge on positive catalysts like production updates, new models, and improved reservation numbers.
This wildcard stock has a beta of 1.08. Key events in Lucid’s young history as a public company have led to major price swings, presenting opportunities for skilled day traders.
9. Coinbase (COIN)
As a leading cryptocurrency exchange, Coinbase stock is closely tied to crypto market sentiment. COIN has an average daily volume of 11 million shares.
The crypto market faces uncertainty this year after crashing in 2022. However, any resurgence in Bitcoin, Ethereum, and other digital assets could send Coinbase shares soaring. Crypto regulation is another wildcard that could impact trading activity.
With a beta of 2.35, COIN is over twice as volatile as the S&P 500, making it attractive for day trading strategies. Quarterly earnings, crypto price moves, trading platform updates, and economic factors make Coinbase a go-to stock for short-term trades.
10. Twitter (TWTR)
Social media platform Twitter had a tumultuous 2022, agreeing to an acquisition by Elon Musk, which now faces uncertainty. TWTR offers day traders an average volume of 36 million shares per day.
Twitter’s stock could see renewed volatility this year, depending on how the lingering Musk buyout situation plays out. The company also faces internal challenges with employee morale, advertising headwinds, and pressure for product innovation.
With a beta of 1.01, Twitter’s stock is prone to above-average volatility. Day traders can key in on events like buyout legal proceedings, activist actions, and new product initiatives as potential stock movers.
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Key Factors for Choosing the Best Stocks for Day Trading
When evaluating stocks to day trade, here are some key factors to consider:
- Volatility – Stocks with frequent large price swings allow for bigger profit opportunities from short-term trades. Beta measures a stock’s volatility in relation to the overall market.
- Liquidity – High average daily trading volume indicates a stock can be bought and sold easily without significant price impacts. Volume is critical for entering and exiting trades nimbly.
- Catalysts – Earnings reports, product launches, regulatory actions, and other events that cause sharp stock movements favor short-term traders.
- Sector Trends – Industry outlooks, economic conditions, and market cycles that lead to volatility in related stocks. For example, fintech stocks fluctuate around interest rate moves.
- Technical Indicators – Day traders analyze indicators like moving averages, relative strength, and support/resistance levels to time entries and exits.
- News Flow – Breaking news that causes emotional market reactions provides opportunities to trade the spikes and dips.
- Pre-Market Trading – Activity before market opens can indicate potential Gappers (stocks set to open significantly up or down from the previous close).
- Risk Tolerance – Newer day traders should focus on higher cap, more liquid stocks. Experienced traders can target smaller cap names with outsized swings.
By carefully screening for these attributes, traders can develop a refined watchlist of stocks tailored for day trading success.
Day Trading Strategies to Know
Utilizing different trading strategies and risk management techniques can help maximize profits while day trading:
Momentum Trading – This strategy involves going long on stocks showing an uptrend, or shorting downtrending stocks. Technical indicators like MACD and RSI can identify momentum.
Breakout Trading – Traders buy stocks as they break above resistance levels or short them as they break below support. Breakouts signal a potential continuation of the trend.
Range Trading – Range-bound stocks fluctuate between support and resistance. Traders go long near support and short near resistance. Ranges persist until a breakout occurs.
Scalping – This high-frequency strategy involves opening and closing many small positions within seconds or minutes to accumulate gains from minor price movements.
News-Based Trading – Major news events, like earnings or FDA approvals, can create volatile trading opportunities. It’s key to act fast before the effect is priced in.
Pre-Market and After-Hours Trading – Extended trading sessions before and after the stock market opens/closes provide additional trading windows. Volume is lower, so risk management is key.
Intraday Pivot Points – Floor pivot points can identify potential support and resistance levels during a trading session. Trades center on reversals at the pivot points.
Proper implementation of these strategies, solid stock screening, and disciplined risk management help stack the odds in favor of day trading success.
Managing Risks in Day Trading
While day trading offers opportunities for profits, the risks involved must be actively managed to avoid significant losses:
- Set stop losses on all positions to automatically close out trades at defined dollar loss amounts you are willing to accept. Using stop losses helps limit downside.
- Use limit orders rather than market orders. Limit orders specify the most favorable entry/exit price you’re willing to accept, preventing slippage on fills.
- Scale position sizes appropriately to limit exposure. Avoid excessive margin and leverage that leaves you over-exposed.
- Diversify your trades over multiple stocks and sectors. This reduces the impact of any single losing position.
- Take profits at reasonable levels to lock in gains. Don’t get greedy waiting for more.
- Trade only with disposable income you can afford to lose entirely, like any gambling activity. Never use money needed for living expenses.
- Set a maximum daily loss amount you will accept, stopping all trading once reached. Limit losses before they balloon.
- Avoid emotional or impulsive trading. Stay detached and stick to your strategy and risk management rules.
With the right precautions, day trading risks can be mitigated for long-term viability.
Frequently Asked Questions
What is the best day trading platform?
Popular day trading platforms include TD Ameritrade, E*TRADE, Charles Schwab, TradeStation, and ThinkorSwim. The best platform provides integrated charts, scanners, watch lists, news feeds, and paper trading/back testing capabilities. Platforms with commission-free trades are also advantageous for active traders.
How much money do you need to start day trading?
Legally, you need at least $25,000 in your trading account at all times to day trade frequently within week-long periods. However, starting with $100,000 or more is recommended to trade full-time. Having more capital allows you to diversify, withstand some losses, and avoid margin calls.
What percentage of day traders fail?
Estimates suggest around 80% to 90% of day traders lose money and are ultimately unsuccessful. Managing risks and volatility is extremely difficult. Start by paper trading to hone your strategy. Only trade real money you can afford to lose until you can demonstrate consistent simulated profits.
Is day trading gambling?
Day trading does involve substantial speculation and risk similar to other forms of gambling. However, skilled traders use research, charts, indicators, and strategies to tilt the odds in their favor. Controlling risk through stop losses and maintaining detachment helps differentiate day trading from pure gambling.
How much money can you make day trading?
Daily profits in day trading can range tremendously based on account size and risk tolerance. Aim for 1% to 3% average profit each day to have a sustainable career. So on a $100,000 account, target daily profits between $1,000 and $3,000. Significant gains and losses are both common though.
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To Recap
Day trading offers an exciting avenue to potentially profit off market volatility, but also comes with considerable risks. It requires ample research, practice, and risk management knowledge. Traders should start slowly, build up adequate capital, and target at least modest daily gains under a tested strategy.
By focusing on liquid, volatile stocks with positive catalysts in 2024, skilled day traders are poised to seize short-term profit opportunities this year. Paying close attention to sector trends, economic conditions, and individual company events will be key to staying nimble.
With the right stock watchlist, platforms, tools, precautions, and mindset, day trading in pursuit of daily gains can deliver thrills along with portfolio growth. As with any speculative investing though, limiting position sizes and downside exposure remains vital.
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