Must-Read for Short-Term Stock Trading! Master these 3 core stock selection principles, and short-term stock recommendations will help you achieve steady profits

Why Is Short-Term Trading Prone to Losses?

In the stock market, you often see this phenomenon: investors who have held stocks for many years never turn a profit, while those who trade frequently find opportunities amid volatility. At this point, many people think—rather than waiting long-term, why not seize short-term fluctuations to profit from the price differences?

The essence of short-term trading is to profit from sharp price swings within a few days. Traders usually do not focus on company fundamentals but rely on technical analysis, market sentiment, and sudden events to predict trends. In theory, this can improve capital turnover efficiency, but in reality, the saying “lose more than win less” still circulates widely—because short-term risks are indeed high, requiring stronger execution and mental resilience.

So, the question is: How can one steadily profit from short-term volatility? Which stocks are suitable for short-term trading? This article will guide you into the first step of short-term trading: scientific stock selection.

Core Logic of Short-Term Stock Selection

The key to short-term trading is not about good or bad fundamentals, but about “amplifying returns through rapid turnover.” Since both long and short positions are feasible, the target stocks must have the following characteristics:

Have themes, trading volume, and large price fluctuations—these three points are indispensable. When the market is volatile or the company releases major news (such as earnings reports, new product launches), it becomes the hunting ground for short-term traders.

It’s important to note that short-term trading has no necessary connection to a company’s long-term fundamentals. Even well-regarded companies may experience price pullbacks or enter consolidation phases. Therefore, technical analysis becomes the core tool for short-term trading—by identifying resistance and support levels to operate within ranges or follow clear trends for long or short positions.

Three Key Points for Short-Term Stock Selection

1. Themes are magnets for attracting capital

Stock prices are determined by investors’ buying and selling behaviors. When current hot topics attract attention, they draw traders in, increasing trading volume and causing sharp price swings.

Themes can stem from industry trends, policy changes, corporate developments, or financial reports. These factors often trigger market attention and drive significant price movements. But be cautious about the freshness of themes—chasing outdated or uncertain themes can lead to being trapped.

For example, NVIDIA (NVDA) has been under long-term market focus due to fierce semiconductor competition and crypto-related businesses, with ample trading momentum, making it very suitable for short-term trading.

2. Trading volume determines the difficulty of entering and exiting

The biggest fear for short-term traders is: correctly judging the direction but unable to execute smoothly.

Stocks with high trading volume have obvious advantages: small bid-ask spreads, quick price reactions, and more transparent prices. Conversely, low-volume stocks may impact the price when buying and could lead to significant losses when selling. Therefore, before establishing a position, ensure the selected stock has sufficient trading volume and market participation.

3. Price volatility is the source of profit

Stocks with themes and trading volume that have too little volatility are not suitable for short-term trading. These stocks are better suited for long-term investors—although their prices may steadily rise, short-term traders cannot profit from them.

In contrast, stocks like Tesla (TSLA), NVIDIA (NVDA), and others exhibit large fluctuations, with gap-ups and gap-downs around earnings reports, creating opportunities for short-term traders. Good earnings can push prices upward with gaps, while disappointing results can cause downward gaps—each event is a window for short-term operations.

Recommended Stocks Suitable for Short-Term Trading

Based on the above three characteristics, here is a list of the most watched short-term stocks in the market, covering hot industries like semiconductors, AI, and electric vehicles:

( In-Depth Analysis of Key Stocks

Tesla (TSLA) — An innovator in the electric vehicle sector, with extremely volatile stock prices. Every tweet from Elon Musk, product launch, or production data can trigger market swings, creating frequent trading opportunities for short-term traders.

NVIDIA (NVDA) — A GPU chip giant with widespread applications in AI, data centers, and autonomous driving. The hotness of the AI industry directly drives NVIDIA’s stock volatility. Market attention is high, and trading volume is ample.

AMD (Advanced Micro Devices) — CPU and GPU manufacturer, direct competitor to NVIDIA and Intel. Recently making breakthroughs in high-end chips, with large price fluctuation space, offering short-term opportunities.

Practical Tips for Short-Term Trading

The core of short-term trading is discipline and cost control. After selecting a target, it’s recommended to use technical analysis to determine buy and sell points, set stop-loss levels, and execute decisively when the price reaches the target zone. Remember: short-term trading is not gambling but a rational effort to seize opportunities through understanding market volatility.