Most Volatile Stocks
Most Volatile Stocks scanning for high volatility stocks and the most fluctuating stocks in price movement today Jan 27, 2022. Learn how to find volatile stocks
quickly with a technical stock screener. This list of the Most volatile stocks 2022 are trading on NASDAQ, NYSE and AMEX.
High volatile stocks are both lucrative and risky stocks to trade, and generally requires a wider stop loss because of the volatility. Stock market beginners should be cautious
because volatile stocks can go up and down pretty quickly. If you are new to stock trading, it is safer to trade trending stocks with lower volatility until
you learn more about the stock market.
High Volatility Stocks
For those who do swing trding or day trading and like the volatility, check out the most volatile stocks today. Please note we do not include volatile penny stocks in this list.
Updated: Jan 27, 2022
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How to Trade Volatile Stocks
The main reason why anyone would want to trade volatile stocks is because these stocks offer the best return in a shorter time. However, high return always comes with high risk. To trade volatile stocks, one must have a higher tolerance for risks.
Beginner traders should stay away from volatile stocks because trading volatile stocks requires skills and mental discipline where can be acquired only through extensive trading experience.
There are a few things to be aware of before we getting into volatile stock trading.
- Volatile stocks are risky - If you are not ready for the risk, you should not be trading these stocks.
- Always Have Stop Loss - No matter what stock you trade, always set a stop loss. The only way to make a profit in the long term is to first protect your capital.
- Keep a Trading Journal - Trading is a business, those who treat it as a hobby will eventually get crush in the market.
- Starting Small - Start with a small account and grow from there. Only trade with the money that you can afford to lose. Borrowing money to trade is not a good idea.
- Short Term Trading - Most volatile stocks are not mean to be hold for the long term although some of them are. Our focus is day trading or swing trading volatile stocks.
- Focus on Trading Better - Most people focus only on the money side of trading which is why they never improved. Learn to become a better trader, and money will come naturally.
- Do Not Over Trade - Most of the money is made by waiting, not trading. Those who over trade will likely to make more mistakes and ruin their portfolio.
- Backtest and Optimize Your Strategy - Whatever trading strategy that you use, you should backtest it with historical data, and then optimize it as you start trading with real money.
The above rules are not limited to volatile trading, it applies to stock trading in general. You can add your own rules as you gain more experience.
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Volatile Trading Strategy
We will be discussing the two approaches to trading volatile stocks, trending following and buying stocks when they are near support or oversold.
Trend Following Strategy
Trending following is one of the oldest and most popular strategies that many traders use. The main goal of this strategy is to buy high and sell higher. We want to trade stocks on the right side of the trend, or to ride a trend. When buying stocks, the longer term uptrend should be up. When shorting stocks, the longer term uptrend must be down.
The time period is based on your trading style. For example, long term has a different meaning to a day trader than a swing trader. For day traders who get in and out of a trade during intraday, the longer term is the daily stock charts. For swing traders, the longer term is the weekly stock charts that we will utilize. For investor, long term could mean months, if not years.
For our purpose, we will be using swing trading to demonstrate our strategy. Day traders can apply the same strategy on a different time frame.
To determine whether a stock qualifies for our watchlist, we will first check if the stock is in an established uptrend on the weekly stock chart.
For example, the stock COUP is in an uptrend which qualifies for our list of stocks to trade. However, the stock is now trading far above the existing trend line, so we will not chase the stock. A better entry point to buy the stock is to wait until it drops and approaches the trend line or wait until a new trend line is established.
Oversold Trading Strategy
To use the oversold trading strategy, we will be using daily charts instead of weekly. The goal of this strategy is to find stocks that have been beaten down and we try to get into trades that are now trading at a bargain compared to their recent high.
When the general market is down, most stocks will go along with it. We do not want to randomly select a stock to trade. We will to find stocks that are oversold, and is showing signs of recovery based on technical indicators.
DIS is one of stocks that triggers a buy signal back in March after it had been beaten down badly in the months prior to March. The RSI indicator is in the oversold area for a month (RSI below 30).
On 3/19/20, the RSI indicator crossed above 30 which is the first sign of strength that the stock may be recovering. However, we should not based our trade based a single indicator.
On 3/25/20, the MACD indicator made a bullish crossover. Both the RSI and MACD are now showing signal for an entry. This is when we would pull the trigger and enter a long position on the DIS stock.
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How to Find Volatile Stocks
There are many ways you can search for volatile stocks. The quickest way is to use a technical stock screener that scans for volatility indicators such as the average true range (ATR), stochastic oscillator,
volume and bollinger bands.
You can use our free stock screener to find the most volatile stocks. In general, stocks trading in the range of $5-$15 are more volatile than
stocks over $100. Small cap stocks are more volatile than stocks with large market caps because it is much easier for big players to move their stock price. When a stock moves up or down with unusual volume,
it's stock price tend to be more volatile in the coming days.
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