Which shares should you day trade on the ASX?

Day trading is a style of trading where a person opens and closes positions within the same trading day, aiming to profit from short-term price fluctuations rather than long-term trends. The trader leaves no exposure overnight (unless it’s part of a strategy), thereby avoiding gap risk when markets open the next day. In Australia and globally, daily traders are a small minority compared to those who hold positions for days, weeks or months. Most retail investors tend to trade less frequently—weekly or monthly—because these longer-horizon styles allow more buffer for volatility and reduce stress from rapid decision-making. Studies suggest that only a modest percentage of traders attempt day trading actively, and among them, only a small subset manage to be consistently profitable

In Australia, day traders face a particularly broad but uneven playing field. The ASX hosts more than a thousand listed companies (often quoted as 1,500+ when smaller caps are counted) but many of those are illiquid or too thinly traded for reliable intraday work. A realistic day-trading universe may shrink to a few dozen names each session, based on liquidity, volatility, and tradeability.

A foundational concept for any trader is volume: the amount of stock traded in a given period (often a single trading day). Volume reflects how many shares change hands. More volume signals higher interest in that stock—either buying or selling—and is often a precursor to price movement. When volume ramps up relative to its recent average, it hints that something is happening: a catalyst, a rotation of money, or a shift in sentiment. Without volume, even a technically perfect setup may fail because your order may be poorly executed or you might be left in limbo.

Liquidity, in turn, is how easily you can enter or exit a position without causing large price impact. If the order book is deep and there are buyers and sellers close to the current price, that stock is “liquid.” If you place a trade and it moves the price against you significantly, that’s illiquidity biting you. For day trading, having both volume and liquidity is essential. High volume without depth can still result in slippage; deep liquidity without volume typically yields little volatility and few opportunities.

Because of these demands, many Australian day traders gravitate toward resource, energy, and exploration names. These stocks frequently respond sharply to commodity news, global demand swings, supply disruptions, or regulatory changes. The resource sector also tends to spawn momentum across peer groups—when one mining stock breaks, related names may follow, giving multiple trade chances. Over time, many traders develop a specialty—sticking with names in sectors they understand and with volatility they can anticipate.

In practice, a day trader’s stock selection process in the Australian market unfolds like this: just before or shortly after market open, they check “most active” and “most volatile” screens from charting or broker platforms. These lists serve as the first filter. From those names, they apply quantitative thresholds: a minimum average dollar volume, share volume, intraday range, and acceptable bid-ask spread relative to expected move. Then they refine down to a manageable watchlist—often just five to ten names—that pass all the filters and show pattern setups or strong relative strength.

Once the watchlist is set, the trader monitors for volume surges (using volume compared to moving averages) plus price action (breakouts, reversals, pullbacks) and sector coherence. The stock that shows confluence of criteria becomes the trade candidate. Trades are entered with predefined stop losses, sensible position sizing, and exit plans (sometimes scaling out of winners). In nearly all cases, positions are closed before market close to avoid overnight risks.

Even the best stock selection doesn’t guarantee success. Risk management and discipline are paramount. Many traders define their maximum loss per trade as a small portion of capital. If the trade moves against them beyond that, they cut quickly. Trailing stops, partial profit taking, or rule-based exits help protect gains. If volume fades, patterns break, or the market changes, they bail.

One rarely hears public stories of standout Australian day traders because most are private or operate via prop firms. But the evidence of behaviour shows resource names frequently dominate “most volatile” and “most active” lists, reinforcing what traders already know: these names often move intraday. Broker platforms like CommSec publish “most traded Australian shares” by client volume, and many retail traders mirror those names in their universes. Over time, names that repeatedly appear in the filtered universe become the trader’s “go-to” stocks. The trader gradually builds intuition about volatility thresholds, candlestick shapes, order flow quirks, and catalyst patterns for those names.

A useful metaphor: the ASX is a vast ocean, but the day trader wants only the strong fast currents near the surface. The rest is too shallow, still, or unpredictable. Selecting stocks is about finding those currents. Over time, the trader learns which sectors, which names, and which capitalisation bands behave best under different conditions. Liquidity, volume, volatility, and pattern consistency become the guardrails around what is tradeable and what is not.

In short, real-life day traders in Australia don’t randomly pick stocks. They rely on filters, screens, and disciplined rules to shrink the universe into a tiny stage of watchable names every morning. Volume and liquidity act as gatekeepers. Volatility and pattern structure create opportunity. Risk rules and exit discipline make or break the performance. Over time, specialization helps amplify the edge. It’s a rigorous, selective process—and it must be, because the odds against consistent profitability are stiff.

Want to day trade? You’ll need an online broker. Here are some top-rated brokers in Australia.

• Pepperstone
• Moomoo
• easyMarkets
• CommSec