How to Identify Which Stocks to Day Trade or Swing Trade?

You can identify which stocks to day trade or swing trade based on their volatility. Volatile stocks are best for day trading, trending stocks are for swing trading.

By Simon Mugo

Edited by Taj Schlebusch

Published April 21, 2021

This is a great question because the stocks suitable for day trading are very different from those best suited for swing trading. The greatest difference between the two types of stock is their volatility. 
Stocks that work best for day trading are usually much more volatile than the stocks for swing trading. Swing trading works best with stocks that trend over time with predictable support and resistance levels.
On the other hand, the perfect stocks for day trading are usually quite volatile and can move a lot during a single trading day. Such stocks typically alternate between gains and losses, allowing day traders to and fro moves in both directions.
Swing trading stocks usually tend to move in one direction once a dominant trend is established. For example, a stock will continue rising if it is in an uptrend and keeps falling once it is in a downtrend.
 Most investors tend to discount the impact of the news, whereas all successful day traders pay attention to the news, but not the mainstream TV channels.
Traders tend to look for stocks with the news behind them and are being traded by other traders. Still, always confirm whether the technical picture supports the news and base your trading decisions off the technicals, which are more reliable. 