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Thursday, 30 January 2014

A Property of the Stocks of Stock Markets

Stocks follow these categories: elephant, mid-size, and ant/mosquito.

An stock that's an "elephant" would have high volumn daily average plus the total shares there are in total everywhere. Reasonably an stock that's classified as "ant" stock would have very low volumn daily average and low total shares (market cap) in the market. Like simple physics courses tells, something with lower mass would be more prone to pushes (changes) by incoming force (from someone selling or buying the given stock shares), while onwardly, a high mass stock would not move - it has this high momentum thing - able to resist each individual purchases and sells. With this kept in mind, these key points are enough to result in net gain overall in 1 year of operation - remember to avoid stocks that are low mass unless you know someone in the company or know it's definately and absolutely way undervalues - otherwise, the elephants (S&P top 500 such as) should be the ones we play with - they are lesser prone to price manipulation; much more stable; unlike a flying mosquito it would not be altered course by the simple wind so easily. Also, something of high momentum (which implies has high mass) are resistant (inert) to big declines or big falls - its momentum will drag things on an extra few hours at least - giving enough time frame for quick decision and actions.  With these simple and yet key points understood, one can break from loss to gain in the game of stock market exchanging (trading) - the difference between win and loss are usually tiny - and yes it can be that easy to flip onward the green side from the red~

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