Just curious if anyone here successfully daytrades low volume (below 300K or so) nyse stocks? Or do you find it more profitable to stick to the higher volume stuff? -Guru
In this trading environment, I have been staying away from most of the <300k volume stocks. Way too dangerous.
mecro, I tend to agree with you. I have gotten suckered into low volume stuff and often times it seems as though I'm the only one trading (LOL). It really sucks going long something thin and having the market rip and your stock just sits there rotting...
It's not even that. There are very few real buyers or sellers in this market. So when you hit that low volume piece of shit stock, chances are the only ones trading it are the specialist and some other day traders. That is a losing game. There arent even any computer progs trading those stocks either. Liquidity is non-existent in them. When and if ever the volume picks up, the low volume NYSE might become gold again. But right now, I will rarely touch a stock doing under 300k daily. If I do, I wont go in with more than 500 shares. Only exception is a certain stock I have been playing lately more in the way of position trading.
I like to trade big gap up/down stocks, but still manage to make some money on daily bases on a low volume stocks like ACH. FFH and TIE used to be good too.
Mecro - Good point about low volume stocks not having much participation. Who wants to trade against other daytraders and the specialist. Probably best to go where the institutions are...
Mecro/Listed Guru When you guys started learning to trade were you taught to trade lower volume stocks, 200k-1mil shares average? I am still trading stocks in that catagory. I agree that it is much harder to trade low volume stocks now. Once upon a time you were able make money by following size. Now there are a lot of fake size on the tape or open book that sets up a screw job.
Ugh, I was in that ACH today, what a piece of crap. I mean what is the point of even risking 100 shares in a stock where you are guaranteed to get the unfavorable side of the wide bid/ask. BuddhaTop Yeah I was trained to trade the 200k-1mil ADV. That size game has been over for years as the specialists paint the tape and even any day trader can fake sizes in Open Book. I've ended up steering toward stocks that do a little under 1mil ADV and have favorites that I taperead. However, when volume strongly drops off like the last 2 weeks, they turn into illiquid low volume garbage. The worst is when they go into an illiquid seesaw and stay in them for days. These stocks truly shine during high volume volatile days. That is when a 50k institutional order can rip or plummet one of these 50 cents or point in minutes. You can actually get in with 2500 shares and not become a specialist's target. For now, I prefer the liquidity and safety of the highest vol stocks.
I have found there is great opportunity in the inefficiencies of the markets. Low volume means wider spreads.