Characteristics of cheap stocks vs expensive stocks

Discussion in 'Trading' started by AshanD, Mar 1, 2006.

    #11     Mar 6, 2006
  2. citrus


    BUying cheap stocks and having them go up is clearly better than buying expensive stocks and having them go down. On the other hand, if you are selling, do you want to sell the expensive stocks or the cheap stocks. I can't figure that one out yet. Maybe someone can help?
    #12     Mar 7, 2006
  3. When you say selling are you referring to shorting?
    #13     Mar 7, 2006
  4. This mornings selection was BCGI. $2.13 - $2.42. Might even double dip this one.
    #14     Mar 7, 2006
  5. kut2k2


    I didn't say that. I said cheap stocks tend to have low volume. If you need further clarification, that means most -- not all, most -- cheap stocks have low volume. This is a fact. And low volume spells illiquidity, something most active traders should avoid.
    #15     Mar 7, 2006
  6. mcelitetrader

    mcelitetrader ET Sponsor


    the outline of the post shows that it doesnt matter the value of the stock but everything is related to the capital involved.....

    I can own more shares of a small stock but it wont move as much .....simple as that....

    The % a stock moves tied to the number of shares is what determines how much is profit/loss....these both tie back to capital in use.

    Never not trade a stock because you feel it is too costly or cheap... you will watch massive moves happen. An example is was 200 bucks.....would you not trade that becuase it is too ends up increasing in value 50% from that point....Lots of profit would be missed if you felt it was too high to trade....

    Note....Unless you have determined the valuation is too high/low based on your valuation.
    #16     Mar 9, 2006
  7. cheap stocks have no clear patterns (u are in gods hands most of da times), are thinly traded, manipulated by insiders and have dramatic nonsensic spikes bound to take u out if on the wrong side.
    give low returns if u don't buy/sell thousands upon thousands of shares and at that point r/r lowers so dramatically it doesn't make sense to trade them in the first place.
    there are so many good opportunities can't see the point of chosin' them over larger caps.
    #17     Mar 9, 2006
  8. Cheaper stocks naturally have higher percentage moves because of the minimum tick being 1 cent (for the vast majority of the stocks). It's simple math.
    High volume requirement is a good way to miss out on some amazing opportunities. NYSE is full of low volume stocks that simply have not beed discovered by institutions yet. The smart investor is in before the institutions naturally force up the stock with volume as they start filling their positions.
    #18     Mar 9, 2006