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Trading Tips-Tim Sykes Penny Stock

How to Find Stocks To Day Trade: A Step-by-Step Guide

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Written by Timothy Sykes
Updated 3/5/2021 16 min read

Are you wondering how to find stocks to day trade? In a hot market like we’ve seen in 2020, there can be huge runners almost every day.

People always ask, “Tim, how do you find these stocks before they spike?”

This might surprise you, but I don’t find them before they spike. One of the biggest indicators I use to find trades is a stock that’s already spiking.

Of course there’s more to it than that. So let’s take a look at how to find stocks to day trade.

Read on as I break down my process of how I find stocks to trade every day and how you can do it too. Let’s do this!

(*Please note: My results, along with the results of my top students, are far from typical. Individual results will vary. Most traders lose money. My top students and I have the benefit of many years of hard work and dedication. Trading is inherently risky. Do your due diligence and never risk more than you can afford to lose.)

What Does Day Trading Stocks Mean?

Day trading stocks means you buy and sell a stock within the same trading day.

My goal is to take advantage of quick upward price movements. The penny stocks I trade move in repeatable patterns and react to news catalysts, stock pumps, and promotions.

Penny stocks are highly volatile. So they can make big moves in a short time. Sometimes they go supernova and run for multiple days. I rarely stick around that long though. I aim to take quick profits of 10%–20% per trade.

Get my no-cost Supernova Alerts to get alerts on stocks that have the potential to go supernova.

If a stock doesn’t do what I want it to before my profit target, I’m quick to get out. My #1 rule is to cut losses quickly. It prevents small losses from turning into big disasters.

And I never risk too much in a trade. 

The quick moves can provide the potential without the risk of holding long term like conventional investors. But penny stocks are still risky — let’s make that crystal clear.

The good news is, I don’t have to hold trades I don’t like for whatever reason. I cut my losses quickly and get out. No matter what.

If this kind of day trading sounds interesting to you, read on. I’ll share how to find stocks to day trade each morning.

How to Find Stocks to Day Trade: Step by Step

You might think I have some big secret about how to find stocks to day trade. I don’t. I share my process with anyone who’s willing to listen and learn. It’s not rocket science, but you must be willing to do the work.

Here’s my step-by-step process, so you can find your own stocks to day trade. First I start with…

The Stock Screener on StocksToTrade

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A stock screener is how most traders find the best stocks to day trade for their strategies.

StockToTrade is my favorite screener and trading platform. It’s created by traders for traders. I helped design it and am a major investor in it. We specifically developed StocksToTrade to find and trade penny stocks.

It has built-in screeners to find the biggest percent gainers of the day. You can also customize your own scans, watchlists, and charts.

Don’t have time to do your own screening and research? Try Oracle, the AI scanner that helps you with trade ideas.

Then there’s the new game-changing Breaking News Chat feature. Two highly skilled market pros alert you to news that can move stocks. It’s helped my trading so much this year.

StocksToTrade really is the all-in-one tool you need for finding and trading penny stocks.

So what do I look for in my scans? That’s simple…

Big Percent Gainers

I want my scans to find the biggest percent gainers — stocks up at least 10% on the day.

If you just search for stocks up 10% on the day, you can end up with a huge list. So you might want to narrow down your search criteria even more…

I like stocks trading under $10 a share, and I like the volume to be at least 100,000 (volume should increase throughout the trading day). If you still get too long of a list, you can narrow it down even more by float size, sector, and stock exchange.

There’s almost an unlimited combination of criteria you could search for.

Once I have a list of big percent gainers I…

Search for News and Study Charts

I search for news and check the chart of each stock on my big percent gainers list. I check the daily and intraday charts.

I’m looking for charts that are close to a breakout level or a beaten-down stock that could potentially have its first green day.

I look back at the chart to see the stock’s movements over the last year or two. I want to see if it’s a former runner or former supernova. And if it is, I want to know how much volume it traded on the days it had a big move.

I read any news articles on the stocks, search Fintwit, and check other chat rooms for activity. I want to know if anyone’s pumping the stock or if it’s heavily shorted. Heavily shorted stocks have the potential for massive short squeezes if buying volume comes in.

The more information you can find the better.

Cut out any stocks that have low volume, no news, and bad sushi charts. Your goal in this stage is to…

Narrow Down Your List

You want to have a list of only a few stocks. Having too many to watch can distract you from the best plays.

You could waste all your time watching a junk stock … Meanwhile, you’re missing a huge runner. That can be frustrating.

Focus on the best setups and make a trading plan for each stock. If there’s a move, you’ll be ready, and if there’s not, no big deal. At least you won’t be frustrated by forcing trades that aren’t there on stocks with no potential.

Now you have your own…


You’ve got your watchlist of stocks to keep your eye on during the day. This doesn’t mean they’ll offer a trading opportunity. That’s why it’s called a watchlist, not a trade list.

Too many new traders think I’m trading all the stocks on my watchlist. They want to know when I plan to get in and out. I don’t even know if I’ll trade them!

I’m watching them throughout the day to see if a pattern develops. I’m looking for things like a breakout on the daily chart, a news catalyst to drop, or big volume to come in. I want to see the potential for the price to spike.

You can re-run your scans throughout the day to find any new spikers that weren’t on your morning list. But remember to go through the whole process for any new stocks you find. Never blindly buy a stock that’s spiking.

Find out which stocks I’m watching each week — subscribe to my no-cost weekly watchlist.

How to Find Stocks to Day Trade in 2021

Now that you know how to find stocks to day trade, let’s go over some types of stocks to day trade in 2020 and into 2021.

Low Float Stocks

Low float stocks can move super fast. They create great opportunities because they’re so volatile. They can have massive price swings to the upside and the downside. So be careful.

You have to be ready to act quickly if you’re gonna trade low float stocks. They can have powerful moves. Especially if a news catalyst and volume combine with a giant short squeeze.

If you’re a new trader, you might not be ready to trade low floats since they can move so quickly. But watch and learn from them. Being able to trade them well is a good tool to have in your arsenal.

Learn how to take advantage of volatility with my “Volatility Survival Guide.” It’s no cost. I give you tips on how to trade in this volatile market and beyond.

Coronavirus Stocks

The coronavirus has been a huge catalyst in the market so far in 2020. Nobody knows how long it will continue, or if it’ll continue into 2021.

But I’ll watch stocks with coronavirus news until I see the market change. Once I see the momentum shift, I’ll adapt.

I don’t try to predict the market, I react to it. 

Along with coronavirus stocks, comes…

Stay-at-Home Stocks

There’s no question the coronavirus has changed the way we live. So once it’s gone (if ever), will life go back to the way it was? Or is this the new normal?

Nobody knows for sure, but I think we’ve seen changes in our lives that will never be the same.

The coronavirus has almost forced us to have a massive evolution. More people than ever are working from home. The technology has been available for years, but people weren’t taking advantage of it. Now they are like never before…

Some companies, like Zillow, Square, and Twitter, have already announced that their employees could work from home indefinitely.

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That could have a massive impact on the economy from cars to infrastructure to commercial real estate … People are shifting their daily habits, skipping expensive morning coffee or grabbing lunch with coworkers. The list goes on and on and can affect other industries.

The good news is when one industry is failing, there’s usually a new industry or technology to take its place. As a trader, it’s your job to find these opportunities.

So when you’re considering how to find stocks to day trade, keep an eye out for…

Hot Sectors

My students and I aren’t just blindly choosing a sector to trade. We look for hot sectors where multiple stocks are running. There’s usually one stock that leads the pack and other smaller stocks follow suit.

Hot sectors can pop up out of the blue, for seemingly no reason. Or they can be caused by economic changes or an exciting new technology.

Study past hot sectors and be prepared for the next one.

Frequently Asked Questions About Finding Stocks To Day Trade

What Are the Top Stock Sectors for Day Trading?

There are tons of stock sectors to day trade. Instead of blindly picking a sector to trade, my students and I trade hot sectors. We focus on stocks with high volume and sectors where multiple stocks are running even without any individual news.

When Should You Start Day Trading Stocks?

You can start trading stocks at any time. But take your time to do research before jumping in. There’s so much to learn. You need to know which broker to use, which stocks to trade, which order entries to use, and how and where to enter and exit trades. Put your education first.

How Many Stock Trades Can You Make per Day?

If you have less than $25,000 in your trading account, you’re limited to three day trades per week. Some brokers have different rules about what constitutes a day trade. Do your own research and check with your broker for their specific rules. Overnight and swing trades don’t count as a day trade.

What’s the Best Time To Day Trade?

The best time to day trade is usually in the morning. That’s when there’s the most volume and volatility in the market. It usually lasts for the first hour and a half. Another good time for trading is before the close. Volume is higher as people get in and out of trades before the close.

Apply for the Trading Challenge

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This year has been an anomaly in the market. The coronavirus crashed the market in March 2020. Since then many new traders have entered the market, and the market hit new highs.

The problem is, a lot of new traders entered the market hoping to make it rich quick. That’s not gonna happen.

Traders with that kind of mindset are why I make people apply for my Trading Challenge. I don’t have time to waste on lazy people who just want hot stock picks.

My goal is to teach students to become self-sufficient traders. I  don’t give them fish — I teach them to fish.

Once you have a solid foundation of trading knowledge you can use it to find consistency in the markets. So your question of how to find stocks to day trade? You’ll be able to answer that on your own. Like my top students.

All my millionaire students come from my Trading Challenge.* I don’t think that’s a coincidence.

It’s because they get access to all my educational resources. That includes all my video lessons, DVDs, live trading and Q&A webinars, and my chat room with access to me and my top students. All my video lessons and webinars are archived so you can go back and study history.

The Wrap on How to Find Stocks to Day Trade

I hope you use these steps to help you find the best stocks to day trade. But remember, there won’t be plays every day. Stay disciplined. Don’t force trades that aren’t there and avoid overtrading. Be patient and always wait for the best setups.

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Study the past and be prepared when the opportunity presents itself. All of my top students put in the work to become self-sufficient and they all found their way in my Trading Challenge.

How do you find your stocks to day trade? Let me know in the comments … I love to hear from you!

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Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”