In the ever-evolving landscape of the stock market, where fluctuations and uncertainties have become the norm, you might be inconclusive about what are some of the best day trading stocks to buy in 2023.
As the financial markets navigate their way through a complex tapestry of global events, day trading has risen to the forefront again. If you are able to harness the inherent volatility and substantial trading volume in the stock market, you will have a high probability of success in day trading.
In this article, you will find discover all about day trading strategies including proper risk management for day trading and explore the best day trading stocks of 2023, shedding light onto some online brokers that you can consider too.
Read also: 10 Best Stocks for Options Trading in 2023
Table of Contents
Heard of Day Trading, But What Is It?
Day trading is defined as the act of buying and selling a batch of securities within a day, or even within seconds. It is the exact opposite of what is perceived of as the traditional way of investing.
Day trading is essentially exploiting the up and down fluctuation of price movements that happen during trading sessions.
To summarize, here is a table showing the best stocks for day trading in 2023:
(as of Oct 2023)
|Apple Inc.||NASDAQ: AAPL||$172.40||$2.70T|
|Meta Platforms Inc.||NASDAQ: META||$300.94||$774.37B|
|Marathon Oil||NYSE: MRO||$25.40||$15.55B|
|Carvana Co.||NYSE: CVNA||$38.21||$7.24B|
|Tesla Inc.||NASDAQ: TSLA||$245.00||$767.7B|
|Palantir Technologies Inc.||NYSE: PLTR||$14.90||$32.05B|
|Advanced Micro Devices Inc.||NASDAQ: AMD||$100.08||$161.70B|
|Nvidia Corporation||NASDAQ: NVDA||$435.17||$1.07T|
|Transocean Ltd||NYSE: RIG||$7.75||$6.54B|
|Marathon Digital Holdings Inc.||NASDAQ: MARA||$7.30||$1.27B|
How to Choose the Right Stocks for Day Trading?
- Have a trading plan on your target goals within your budget.
- Identify some of your best day trading stocks that are most active and with high liquidity.
- Check the headlines of the stock to determine the momentum and market sentiment of the stock.
- Look out for stocks in various industry to diversify your portfolio risk.
- Once decide what stocks to include, come up with a proper risk management, which will be discussed below.
- Step up proper stop-loss orders to avoid substantial losses.
- Regular review of your portfolio performance and look for trends in your trading
- Keep abreast of the current news related to your stocks and gauge the market sentiment.
Top 10 Best Day Trading Stocks to Consider
1. Apple Inc. (NASDAQ: AAPL)
Apple’s track record boasts a consistent release of groundbreaking technological products, including the iPod, MacBook, iMac, iPhone, and iPad. These innovations have significantly contributed to the company’s stock appreciation.
Anticipations remain high for Apple’s stock performance, especially in the wake of the recent launches of their newest iPad and iPhone models.
The ongoing release of innovative products such as the latest iPhone 15 and 15 Pro is expected to further bolster the company’s market performance.
2. Meta Platforms Inc. (NASDAQ: META)
Meta, formerly known as Facebook, stands as the leading social networking platform, with its inception in 2004 credited to Mark Zuckerberg. Boasting an impressive user base of over 2.9 billion monthly active users spanning across platforms such as Whatsapp, Facebook, Instagram, and Messenger.
Meta has demonstrated sustained growth. The company derives its revenue from advertising, with Europe and North America serving as main contributors.
Notably, Meta’s stock has exhibited an upward trajectory in recent times, rebounding from a dip experienced in the final quarter of 2022. Over the past 52 weeks, its share prices have oscillated between a high of $328 and a low of $88.
For those engaged in day trading, Meta’s stock presents an enticing opportunity, driven by factors such as substantial trading volume, pronounced volatility, a robust media presence, promising growth prospects, and alignment with prevailing consumer trends.
3. Marathon Oil (NYSE: MRO)
Marathon Oil, an independent company with main core business in the exploration of oil and natural gas. It has a rich history dating back to its establishment in 1887, initially under the name USX.
Presently headquartered in Houston, Texas, the company operates both within the United States and overseas.
In the U.S. market segment, Marathon Oil is actively involved in the exploration, production, marketing, and condensation of oil and natural gas products. Its inclusion on the best day trading stocks list is attributed to the notable volatility it has experienced in recent months.
This volatility arises from the fluctuations in oil prices, primarily influenced by production adjustments made by OPEC and other underlying macroeconomic factors.
4. Carvana Co. (NYSE: CVNA)
Carvana, established in 2012 by Ernest Garcia and two partners, has emerged as a prominent player in the U.S. automotive industry. With its headquarters located in Tempe, Arizona, the company made its debut on the stock market through an IPO in 2017.
Carvana specialises in delivering a distinctive online purchasing experience tailored to the used car market. Carvana’s revenue streams are quite diversified, from vehicle sales, loan services, and various commissions.
Its reputation has soared in tandem with the steady growth of the used car market. Projections suggest an annual revenue increase of approximately 16.31%, culminating in a remarkable peak of $12.84 billion in revenue, with an impressive sales volume exceeding 420,000 cars.
The company’s enduring commitment to innovation, expansion initiatives, and its engagement with legal matters collectively position Carvana as an appealing prospect for day trading enthusiasts.
5. Tesla Inc. (NASDAQ: TSLA)
Tesla is a dominant force in the global electric vehicle (EV) manufacturing industry, bolstering its position over the years, solidying its dominance in the industry’s future.
After its 2010 IPO, Tesla diversified its offerings beyond luxury vehicles and embraced the unique Gigafactory model. The company expanded into energy generation and storage with products like the Powerwall and Powerpack, making Tesla stock an appealing investment.
In 2022, TSLA stock faced challenges, losing 70% of its value and over $700 billion in market cap. However, it rebounded by over 50% after achieving a 40% increase in vehicle deliveries compared to the previous year.
6. Palantir Technologies Inc. (NYSE: PLTR)
Palantir Technologies Inc., an American software company specialises in intelligence platforms for counterterrorism and related operations, with its flagship product Palantir Gotham aiding in data analysis and threat response.
In 2023, the company exceeded expectations with strong quarterly results, leading to a doubling of its stock price in May, partly due to the AI market trend.
However, analysts project potential stock value decline of up to 30%, and the PLTR stock is expected to remain highly volatile with a beta of 2.84.
7. Advanced Micro Devices Inc. (NASDAQ: AMD)
Advanced Micro Devices (AMD), a California-based semiconductor manufacturer, is renowned for its chipsets and GPUs. Its emphasis on high-performance computing and graphics has secured significant contracts with tech giants like Oracle and Microsoft, making it an attractive investment option, driven by its dedication to innovation and quality.
For day traders, AMD’s substantial trading volume presents an appealing prospect. The company benefits from the growth in gaming, cloud computing, and cryptocurrency mining. However, it’s also impacted by the ongoing US-China chip conflicts and competition from Qualcomm and Intel.
In 2022, AMD grappled with the slow adoption of personal computers (PCs), but managed to achieve impressive revenues surpassing $23.5 billion, bolstered by other business segments.
Although its shares dipped to $55 in October 2022, they subsequently rebounded, experiencing a robust nearly 30% increase.
8. Nvidia Corporation (NASDAQ: NVDA)
NVIDIA, headquartered in California, specializes in GPUs, SoCs, and high-performance computing tech for gaming, data centers, AI, and self-driving cars.
NVDA stock has a bullish run since the start of the year. The price was up 89% since February and had a gain of 176% in 2023 year-to-date. More than anything, its tremendous growth is largely attributed to the strong AI wave markets experience right now – and the company has only begun to tap into the AI growth opportunity.
NVDA stock has seen a bullish trend in 2023, up 89% since February and 176% year-to-date, driven by the AI market. Daily price fluctuations offer quick gain opportunities, and the stock is projected to reach $449.92 or even $600.
9. Transocean Ltd (NYSE: RIG)
Transocean Ltd., headquartered in Vernier, Switzerland, is an international company specializing in offshore contract drilling services for oil and gas wells. Established in 2008, the company manages a fleet of mobile offshore drilling units and provides comprehensive services such as drilling management, well services, and engineering support.
Although Transocean faced a challenging start to the year, it now stands in a favorable position to capitalise on the renewed interest in offshore drilling, driven by diminishing oil reserves among energy companies.
Notably, following Transocean’s earnings announcement in April, the stock witnessed a substantial surge in value, recording an impressive 6.6% increase, surpassing the performance of the S&P 500 index during the same period.
However, the stock has experienced a gradual decline in recent times, and there is an expectation of increased volatility. Presently, it boasts a high beta of 2.91, with a trading range fluctuating between $5.84 and $6.09.
10. Marathon Digital Holdings Inc. (NASDAQ: MARA)
Marathon Digital Holdings, with its headquarters situated in Las Vegas, Nevada, manages a cryptocurrency mining facility.
It maintains an active presence in the market, with an average trading volume of 37.38 million shares out of a total outstanding of 174.8 million. Over the preceding 52 weeks, the stock’s price has oscillated within a range spanning from $3.11 to $19.88.
Analysts have projected a price surge to $14.75 for this stock, and it has garnered a ‘strong buy’ rating from four experts in the field.
What Are the Best Online Brokers for Day Trading?
1. eToro – Best for Beginners (Overall Rating: 5/5)
- No trading or platform fees
- Offers stop, trailing stop, and limit orders
- Includes social and copy trading features
- Provides access to a virtual trading account
- Imposes a $5 withdrawal fee for non-US currency transactions
- Charges a relatively higher foreign exchange conversion fee of 0.5%
- Lacks telephone support for customer assistance
- Enforces an inactivity fee of $10 after 12 months of account dormancy
Link to the website: eToro
2. InteractiveBrokers – Best for Advanced Traders ( Overall Rating: 4/5 )
- Extensive support for a wide variety of assets
- Real-time news updates accessible within the platform
- Low commissions and competitive margin interest rates
- Many different scanning tools available across various asset classes
- Traders Workstation may present a challenging learning curve for users.
- The pricing structure can be intricate and may require careful consideration.
Link to the website: InteractiveBrokers
3.Webull – Best for Low-Cost Day Traders ( Overall Rating: 3/5 )
- Swift and straightforward account setup process
- Availability of demo account or paper trading for practice
- Access to extended hours trading
- Minimum balance requirements
- Feature-rich trading platforms – both on laptop and mobile device
- Customer support services is sub-par
- Limited variety of available assets for trading
- Slower execution speeds in terms of pauyment for order flow
- You do not receive income on excess cash balances
Link to the website: Webull
What Are the Benefits and Risks of Day Trading?
Day trading can yield significant benefits when executed in the right way. The realm of day trading presents numerous interesting facts, yet it is crucial to strike a balance between its enticing benefits and the potential pitfalls that may impact your quest to achieve consistent profits.
1. Day trading is easy to get started:
- All you need is a good fundamental knowledge of the stock market setup, internet connection and a digital device (eg: laptop or mobile device).
2. Potential success even in the bearish market condition:
- You, as a day trader can make the most out of a bad financial market by leveraging on short-selling strategies.
3. There is no overnight risk involved:
- You would usually open and close positions before the trading day ends to secure the profits or possibly cut loss on the trade. Therefore, there is no risk associated with holding a stock overnight.
4. Possibility of High Returns:
- By following a proper strategy on day trading, you can reap for high returns on the trades regularly with small price fluactuations – through strategies like leverage trading or trading with margins.
1. High volatility:
- The unpredictability of the stock market is because of the high volatility environment While big fluactuations of the price can help you to lock in profits, but it could also cause you to lose your capital quickly.
2. Multiplied margin risks:
- Trading using margins is an act of buying stocks with borrowed money to increase the buying power. Margin trading is not for everyone. In the event where you are losing money, not only do you need to reload your account with more capital, you also end up owing an amount of money to your brokerage firm.
Common Mistakes to Avoid in Day Trading
1. Not doing technical analysis:
You as a day trader should encompass examining price fluctuations, scrutinising volume charts, and considering various technical indicators to make informed decisions. These indicators serve as valuable tools for you to assess whether a stock will adhere to recent trends and for how long such trends might persist.
Market dynamics are known for their swift and unpredictable changes. Nevertheless, using technical indicators to their full potential and staying attuned to current trends represents the safest approach for you.
A critical blunder that many intraday traders make is hastily selecting stocks for trading. In trading, it’s essential to exercise patience and meticulously choose the most suitable stocks for your strategy.
2. Trading stocks that are not liquid:
Engaging in the trade of illiquid stocks represents a common and significant blunder frequently made by day traders, often stemming from insufficient research. It is imperative to grasp the pivotal role that stock liquidity plays in intraday trading.
Let’s illustrate this with a scenario:
Imagine you buy a particular stock early in the morning with the intention of selling it for a profit before the market closes. However, there is a predicament where there are no prospective buyers for the acquired stock. Consequently, your sell order may remain unexecuted, and the stock could be deposited back into your account.
Hence, it is paramount to ensure that your trades are placed in companies with robust liquidity in their market shares.
3. Neglecting the Trading Plan and the Trading Diary:
Two vital elements often overlooked by intraday traders are the trading plan and the trading diary.
The trading plan serves as a blueprint outlining how intraday trades like yourself should be conceived and executed, such as profit targets, stop-loss levels, and the selection of optimal trading hours.
On the other hand, the trading diary diligently records all the trades executed throughout a single trading day, along with justifications and an end-of-day (EOD) analysis of performance. This diary serves as a valuable tool for you to identify weaknesses and bridge gaps in your trading strategy.
Ignoring the importance of both the trading plan and the trading diary can significantly hinder your path to achieving success.
Risk Management in Day Trading
1. Cut Losses using Stop Loss
A stop-loss order serves as a predefined exit strategy for trades that are incurring losses. These orders can either be manually activated or set up to execute automatically through your broker’s platform. The primary objective is to limit losses before they escalate to unmanageable levels.
For day traders, adhering to stop-losses consistently can prove to be one of the most challenging aspects of trading. Nevertheless, neglecting to employ these risk management tools can lead to margin calls and avoidably substantial losses.
2. Using Risk-to-Reward Ratio
As a day trader, you want to be able to identify trades in which the potential reward significantly outweighs the potential risk. Every trade possess a favorable risk/reward ratio.
Essentially, a risk/reward ratio quantifies the amount of money you’re willing to risk compared to the amount you anticipate gaining. For instance, if you anticipate a potential trade yielding either a $400 profit or a $100 loss, the trade would exhibit a risk/reward ratio of 4:1, indicating a promising setup.
Conversely, if you’re risking $100 to make $100, the trade’s risk/reward ratio stands at 1:1, presenting unfavorable odds akin to those encountered in a casino.
In general, you could pinpointing trades with high risk/reward ratios (3:1 or higher) serves as a fundamental strategy to uphold greater average profits while minimising average losses.
Strategies for Day Trading Success
1. Momentum Trading
Momentum trading capitalizes on stocks that experience significant upward price momentum.
These elusive momentum stocks possess distinctive characteristics such as:
- A significant price surge triggered by a catalyst.
- A price movement of 30% or more.
- Typically, smaller stocks with faster trading due to a reduced float of under 100 million shares.
2. Scalping Strategy
Credit: Trading Setup Review
This strategy revolves around the idea that small, frequent wins can accumulate into substantial gains over the course of a trading day.
Scalping establishes predefined buy and sell targets, executing trades swiftly which operates at a rapid pace and several trades occurring within seconds.
This strategy is perfect for confident traders who make quick decisions without hesitation.
3. Pullback Trading Strategy
The pullback trading strategy begins by identifying a stock or ETF with an established trend.
Day traders then monitor this trend until a price decline, or “pullback,” occurs.
If the prevailing trend is upward, the pullback represents an entry point for traders to buy.
4. Breakout Trading
This strategy of day trading happens when a stock’s price surpasses its previous resistance level.
Breakouts stocks with high trading volumes are generally more sustainable at the new price level compared to those with lower volumes. On the other hand, lower-volume breakouts are prone to retracing below previous resistance levels, making profitability more challenging.
Often, after reaching the resistance level, the stock may retreat until a catalyst or special event prompts a more substantial price movement. Above the specific price point, there are typically more sellers than buyers, preventing further price increases.
5. News Trading
News trading is using the momentum gained from the daily news stories by closely monitoring business news updates.
There are two main approaches for news trading strategy:
- When negative news surfaces, traders may short a stock by borrowing shares and selling them. If the stock price declines as expected, they buy back the shares at the lower price, profiting from the difference after accounting for commissions.
- Conversely, in response to positive news, traders may long, buying the stock and selling it after the price rises.
If you find that day trading is a worthwhile pursuit, then start doing your research on the best day trading stocks mentioned in the article as your first step to day trading.
There are different strategies such as scalping, that is the buying and swift selling of a substantial number of shares to capitalise on minor price fluctuations, that you can look into further once you are more comfortable in your trading journey.
Nonetheless, it’s crucial to acknowledge that day trading is not a venture for the risk-averse investors, as it carries the inherent risk of substantial losses within a brief timeframe. With diligent research and meticulous monitoring of your chosen best stocks for day trading, you may discover a path to success, all while enjoying the exhilaration of the process.
Frequently Asked Questions
*General Advisory Disclaimer:
This article provides advice that does not factor in your specific objectives, financial circumstances, or requirements. Prior to taking any action based on this information, it is important to assess the suitability of the provided information in relation to the characteristics of the relevant financial product, taking into consideration of your individual objectives, financial situation, goals and needs.