One of many day trading strategies is to buy the breakouts. However, if you are going to engage in high frequency trading, you are going to need volitle stocks. You may wish to buy penny stocks, or at least small cap stocks. However, there is a danger between these as there can be a substantial difference between the bid and the ask price. This means that those looking to buy and those looking to sell are generally asking for different prices. As such, you should always use limit orders otherwise there will be some serious slippage in every order. Otherwise, you can find a more liquid stock that is volitile such as sunmicro systems (JAVA).
You may wish to sell penny stocks andinstead "fade the rally" this is a dangerous strategy if volume keeps coming in as it could force you out of a short position if the stock advances higher. The idea is that you are playing a revision to the mean. A stock that has rallied significantly will eventually pull back.
There are other day trading strategies as well. You can also play trendline and trendline breaks. If a stock gains a bunch then declines, and you notice that the stock begins to advance higher again, you may wish to buy this stock in anticipation of another rally.
If a stock clears an all time high, a daily high, a weekly high a monthly high a 52 week high or a psychological level, you may wish to buy the stock looking for a breakout. The idea is that more buyers have emerged and overpowered the sellers, and since the sellers didn't step in, they may have moved on. In other words that stock may continue to rally.
Ultimately buying penny stocks and taking on high risk high frequency trading can cost you a bundle in brokerage fees, take up a lot of time, and be difficult to learn. As such man traders lose a bundle, however the selectfew that do well do very well as all of that cash that the 90% of trader s lose has to go somewhere. Day trading can be very fun, however it can also be very dangerouus. Please do your due dilligence before engaging in trading.
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Macro Traders also typically look at the breakouts, but rather than focussing on penny stocks, they look across asset classes and strategies.