Lately, more and more friends are focusing on short-term trading. Many look at their long-term positions with no activity and think it might be better to try their hand at short-term gains. To be honest, short-term trading does have its appeal—quick capital turnover and clear rhythm—but the premise is that you truly understand how to select stocks.

The core logic of short-term trading is actually very simple: profit from price fluctuations. There’s no need to obsess over whether a company's fundamentals are good or bad; the key is whether there are buyers and sellers actively trading the stock now, and whether the volatility is sufficient. After observing the market for a while, I found that stocks suitable for short-term investment usually have three characteristics: they have a theme, high trading volume, and large price swings.

First, let’s talk about having a theme. Stock prices are formed by investors’ buying and selling behaviors. The current market hotspots tend to attract trading volume. Topics like AI and semiconductors are especially hot right now. Stocks like NVDA are almost daily targets of hype. The theme needs to be fresh and sustainable; chasing outdated themes often results in getting trapped.

High trading volume is also crucial. My biggest fear is buying in but being unable to sell out. Therefore, before entering, you must confirm liquidity. Stocks with high trading volume have narrow bid-ask spreads, quick price responses, and allow you to seize opportunities or cut losses in time. Conversely, stocks with low trading activity, even if they have volatility, should be avoided because you might not find counterparties to sell to.

Finally, the magnitude of volatility. Some stocks, despite having themes and trading volume, show little price movement and are not suitable for short-term trading. TSLA and SMCI are different—they often experience intraday swings of 5%, 10%, or even more. Earnings reports, especially around release times, are golden opportunities for short-term traders, as the stock price often gaps to reflect market expectations.

Based on these characteristics, I’ve categorized the short-term stocks I’ve been watching recently. The AI and semiconductor sectors are currently the clearest main capital flows, with NVDA, SMCI, and AMD repeatedly traded. If you can handle larger swings, there are plenty of high-volatility theme stocks with short-term opportunities, but be mindful of slippage when entering and exiting. Cryptocurrency concept stocks like COIN and MSTR, which are highly correlated with Bitcoin, are suitable for trend-following trades. Then there are popular giants like TSLA and PLTR, where retail funds are concentrated, providing daily liquidity. Lastly, event-driven stocks, such as ORCL, tend to have implied volatility spikes around earnings reports, often jumping more than 5%.

Personally, I most often watch NVDA. As the leader in AI chips, its volatility characteristics are very clear, and technical signals are clean. SMCI is also good; during earnings releases, the daily volatility can exceed 12%, which presents opportunities for short-term traders. TSLA relies entirely on popularity—Elon Musk’s tweets can trigger 5% to 10% swings, reflecting strong retail sentiment.

The biggest risks in short-term trading are transaction costs and discipline. The US stock market has high liquidity and no commission fees, making it especially suitable for short-term strategies. If you want to try these tactics, start with a demo account to get familiar with the volatility rhythm, then consider small capital real trading. The key is to have a clear plan for entry and exit, and not to be carried away by market emotions.