How to select a low cost stock (<20$) with high returns + moderate risks for day trading purpose?

I want to know what parameters (with what values) to look in a stock to buy for 1-5 days investment/trading period.

Also, I want to know if I can buy mutual funds for day trading purpose? If yes, I guess that will be safer approach to invest for this short periods, make profit and then re-invest.

Please advice.

Based on the wording of your questions, it would be in your best interest to study the markets and the products traded in them.

Here are some websites that can be used to screen for stocks that can meet parameters you set

http://busystock.com/index.php
http://screener.finance.yahoo.com/newscreener.html
http://www.nasdaq.com/reference/guru.stm
http://www.stockta.com/
http://screen.morningstar.com/StockSelector.html
http://moneycentral.msn.com/investor/StockRating/srstopstocks.asp
http://www.zacks.com/
http://screen.morningstar.com/StockResults.html
http://www.options-trading-advice.info/

You can not "day trade" mutual funds. Funds prices are determined on the asset value of the fund as of the close of business on the trade date and the price movement of the fund is not that great to warrant profits from short term holding periods