What to buy for short term gains

Important Note on Short-Term Gains

No filter can guarantee short-term gains. What these criteria do is tilt the search toward stocks that currently show strong momentum and liquidity, which traders often look for when aiming for short-term opportunities—but the risk of loss is still significant.

Screening Filters

1. Market Cap ≥ $2,000,000,000

   • Purpose: Focus on mid- to large-cap companies.

   • Rationale:
     For short-term trades, you often want:

     • More established companies (less likely to be “story stocks” that can collapse on a headline).
     • Tighter bid–ask spreads and deeper order books.

     A $2B+ market cap filter removes very small, highly speculative micro-caps that can be extremely volatile and illiquid, which might not be suitable for many investors seeking short-term gains with some level of stability.

2. Monthly Average Dollar Volume ≥ $1,000,000

   • Purpose: Ensure sufficient liquidity for entering and exiting positions.

   • Rationale:
     Dollar volume (price × volume) captures how much money actually trades in the stock each day on average. For short-term trading:

     • You want to be able to get in and out quickly without moving the price too much.
     • Higher dollar volume usually means narrower bid–ask spreads and better execution.

     A $1M+ monthly average dollar volume filter screens out thinly traded names that can be hard or costly to trade in the short term.

3. Relative Volume ≥ 1.5

   • Purpose: Highlight stocks currently trading with significantly higher activity than usual.

   • Rationale:
     Relative volume compares today’s trading volume to the stock’s typical volume:

     • A value ≥ 1.5 means the stock is trading at least 50% more volume than normal.
     • Elevated volume often accompanies important news, breakouts, or strong buying/selling interest.

     For short-term gains, traders commonly look for unusual volume as a sign of active participation and potential continuation of the price move.

4. RSI Category: “Moderate” or “Overbought”

   • Purpose: Focus on stocks already in an uptrend or strong momentum phase.

   • Rationale:
     RSI (Relative Strength Index) measures recent price momentum:

     • “Moderate” RSI: stock is trending up but not yet extreme.
     • “Overbought” RSI: strong upward momentum; many short-term traders look for these as momentum plays, betting that strength can persist for a bit longer.

     By excluding “oversold” or very weak momentum names, this filter aligns with a trend-following / momentum approach, which is commonly used for short-term gain strategies.

5. 1-Week Price Change ≥ 5%

   • Purpose: Require recent, positive short-term price momentum.

   • Rationale:
     A gain of at least 5% in the last week signals:

     • Active buying pressure.
     • A short-term uptrend already in place.

     This steers the screener toward names that are already moving up, which is often what short-term traders look for rather than trying to catch bottoms.

6. 1-Month Price Change ≥ 20%

   • Purpose: Ensure the stock has strong medium-term momentum, not just a one- or two-day spike.

   • Rationale:
     A 20% move in a month is substantial and suggests:

     • Sustained interest from buyers.
     • A positive narrative or catalyst driving the stock.

     Combining this with the 1-week filter strengthens the idea that the uptrend is both recent and durable enough to potentially continue in the short term.

Why the Results Match Your Request

• Short-term momentum focus:
  The combination of:

  • Positive 1-week performance,
  • Strong 1-month performance,
  • Moderate/overbought RSI,
  • High relative volume,
    targets stocks that are already exhibiting strong upside momentum, which is typically what traders seek for short-term gains.

• Tradable and lower-friction names:
  The market cap and dollar volume filters:

  • Remove illiquid micro-caps and thinly traded names.
  • Improve the likelihood that you can enter and exit positions efficiently, which is essential in short-term strategies.

In summary, these filters are tailored to find reasonably liquid, established stocks that are currently in strong uptrends with heightened trading activity—conditions that many short-term traders look for when hunting for potential quick gains (while still accepting the risk that momentum can reverse).