DaytradeTeam Profitzzz
Recaps of DaytradeTeam Trading Systems Performance
Thursday, August 25, 2005
Swing Trading Small Cap Stocks
Trading stocks that are priced under $20 or even $10 per share requires a little more guts and experience than trading higher-priced, more familiar stocks. Here are a few ways that DaytradeTeam has made small cap trading a very profitable venture:
- Stick to High-Volume Stocks: Just because a stock is low in price doesn't mean it has to be low in volume. High volume stocks tend to have much better liquidity and therefore advantagous entry and exit prices for stock traders.
- Don't catch the Falling Knife: When a stock is moving downwards quickly into the sub $10 range, it is usually doing so for a reason. Remember, shares are only "cheap" if they are actually worth more than the current price.
- Use a 5-7% stop loss: Limit your risk by forcing yourself out of positions that don't hold up well. When a stock falls by 5-7% and you thought it was going up, it is a good idea to start thinking that you might have been wrong and look for other opportunities
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