Choosing stocks for trading is the most important thing for a trader when he approaches trading.
The most important rule in choosing stocks is that the stock must have hot news, the news can happen after the market or before the market opens, there are times the news will happen during trading but that’s another topic and we won’t talk about it right now.
**There is some news that happens most often and can create big movements in the stock during the day:**
1. Earnings report.
2. Guidance raised.
3. FDA approval.
4. FDA decline.
5. Company Investigation.
6. Analyst upgrade.
7. Analyst downgrade.
8. Company Partnership.
9. New product to sell.
10. Stock gap up/down 3% with increased pre-market volume.
**There are some criteria that we think are very important for a beginner trader:**
* The stock price must be $10 or more.
* The average volume in the last 30 days must be at least a million shares.
* The ATR of the stock must be above 0.75 cents.
* The stock must be accompanied by hot news.
* The stock must gap up at least 3% in the pre-market.
These criteria will protect you in the beginning because stocks of this type are more convenient for trading when it comes to exiting and entering the stock without problems, and stocks that have momentum and can make nice movements during the day and not get stuck in place.
**Hope I helped some beginner traders that could not find the right stocks to trade, and wish everyone a great week.**
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Is trading volume measured in the average number of shares traded per day? Also, why do you write that the stock’s price should be $10 or more?