ANSWER:
Ignore @Steve2...he obviously has issues and has no tools to work with IF he trades stocks at all.
You are wise to want to have some technical tools when day trading. Fundamental analysis does not work in Day Trading since all bets are off with respect to fundamentals when you are dealing with trades that last a few hours at most. I don't day trade but I will try to answer your questions to the best of my ability.
Day trading needs a story and it needs people to buy into that story. I hate to say it but Media Buzz is the juice that drives day trading. I can suggest an excellent way of finding a stock that will have potential for short term 1 - 4 week swings...but I cannot advise you what will happen tomorrow that will give you a few hour 10-30% gain using TA....though these types of day trading swings do happen and if you are skilled enough to play them they can be very profitable. However, most daytraders...especially newbies... don't have these skills and they trade scared.
So...your first tool is the Pumping RAGS that we as swing and long term traders dislike intensely. From there you get a list of stocks that will probably move the next day.
Now to analyze the companies mentioned here, you need a good intra day chart....I will use Bigcharts.com....it is not the best for doing live trading since in live trading it has a 20min delay. You need a streaming data chart for that...free ones are either (I suggest you get to know either or both very well)
http://www.level2stockquotes.com/level-ii-quotes.html
where you can watch up to 4 charts at once but only one with any TA ...OR
http://www.freestockcharts.com/
here you can follow only one stock but in a great deal of TA detail
But for this demo let us use BigCharts.com and check out a couple of the selections from AllPennyStocks.com
SMF Energy Corp.[NASDQ:FUEL]
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=smf&x=35&y=16&time=2&startdate=1%2F4%2F1999&enddate=4%2F12%2F2012&freq=6&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=9%2C20&uf=8&lf=1&lf2=0&lf3=4&type=4&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
This is a poor daytrade stock....why? not because the stock is falling (you can short those)...no it is because there is no volume, not enough shares are traded....a good daytrader wants to get in/out as fast as possible at 100,000 shares traded this cannot be done reliably.
American Apparel AMEX:APP
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=app&x=31&y=14&time=2&startdate=1%2F4%2F1999&enddate=4%2F12%2F2012&freq=6&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=9%2C20&uf=8&lf=1&lf2=0&lf3=4&type=4&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
This has the volume in the early day...and could have been a choice but unless you purchased it at the last hour of Wed...you would have had no chance to make a reasonable buy on Thursday as all the action happened in the first hour.
However...NOTE THE VOLUME INCREASE with rising price and narrow Bollinger Bands on the last hour of trading on Wed....there is a good clue as to potential candidate for the following morning.
Now here is a good DAYTRADE stock today (Thursday) FreeSeas Inc...NASDAQ:FREE
I don't know how you would find it...I used FinViz.com
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=free&time=2&startdate=1%2F4%2F1999&enddate=4%2F12%2F2012&freq=6&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=9%2C20&uf=8&lf=1&lf2=0&lf3=4&type=4&style=320&size=4&x=43&y=11&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
The tools I would get to know well are Volume,Bollinger Bands(BB), and MACD (you can add others as you get more proficient)
SEE how the BBs are very narrow at the end of the previous day and the price is above the 20daySMA..see the increased volume as the new day starts...SEE the blue signal line of the MACD above the Brown MACD line...that is your buy signal...you should be able to catch the stock between .20 -1.30 if your react fast
See how the price stays above the 20dayMA and walks along the UPPER BB...see how the MACD blue line stays above the brown one. You have a couple of sell points...I like the MACD blue line falling below the brown @11:30am (about .90)...the surge in volume @ 11:10am (about .00) or when the blue line of the MACD really falls below the brown line@ 12:15 (About .05)
USING TA you would gain between [FAQ-ANSWER].60 to 0.75 on a .25 buyin...not bad for 2 hrs work.
You would of course use those streaming data charts to track the progress....not BigCharts.
This is a starter for you...learn this first and practice a bit on paper before using real money
Source:
http://tradinggold.net/?p=27654