How to Find High Volatility Stocks to Trade
When it comes time to trading stocks, it is important to find high volatility stocks to trade.
Also, volatility equates to uncertainty and a lot of movement.
Therefore both of these are very beneficial to you as a trader.
In today’s article I will discuss how to find high volatility stocks to trade on a daily basis.
High Volatility Stocks – Which Companies Qualify?
High volatility stocks are those that are expected to make big and unexpected moves at any time.
The technical definition of stock volatility is the statistical measure of the dispersion of returns.
Volatility is measured is by the stock company’s beta.
Stock beta of 1.0 means that you are expecting a stock to move $1 for every $1 the broad market moves.
That is, values above 1.0 indicate the stock is expected to move proportionally higher for each $1.
Apple currently has a beta of 1.11, which means it is 11% more volatile than the market average.
To find these vales you can go to Finance Yahoo and pull up any stock profile.
If you want to learn more about overall stock market volatility click here to read this article >
High Volatility Stocks – How Do I Find the Most Volatile Ones?
In this step I will instruct you how to screen for the high volatility stocks by beta values.
You can access this free stock screener tool offered by Yahoo.
- Visit Finance Yahoo Screener here>
- Click “Add Another Field” at the bottom of the screener
- Select “Beta” and click close
- Multi-select 1.2 to 2.0 and >2.0 options
- Click “Find Stocks” button at the bottom
Here is an example of what your screener should look like at this point.
You will now see a list of all the stocks that match the criteria.
At this point, you will notice that technology stocks will likely be near the top.
Because technology companies are still in rapid growth mode of their life cycle they also pose the most amount of uncertainty. This uncertainty translates to a wider possibility of price movement in the future.
Therefore, these stocks are great for day traders and active investors looking for a move.
High Volatility Stocks – More Advanced Screening Options
If you are looking for some more advanced stock screening options, you are in luck.
I have created a YouTube video reviewing the top stock screeners.
You can customize them by optionable stocks, momentum and even technical analysis patterns.
I have attached the video below for your viewing.
High Volatility Stocks – Conclusion
Volatility is often feared if you are an inexperienced investor or trader.
However, as you are equipped with the right tools stock market volatility is very lucrative for profit opportunity.
When a stock is moving, you can be making money when you are on the right side.
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The information contained in this post is solely for educational purposes, and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. TRADEPRO Academy is not responsible for any liabilities arising as a result of your market involvement or individual trade activities.