Types of Stocks That Are Traded the Most
For an aspiring trader, it can be intimidating as well as confusing to try and determine which types of stocks that are traded most for the largest returns among a universe of stocks that are traded around the world.
In the U.
S.
alone, there are over 8,000 publicly traded companies and countless more around the world but, out of that number, there are only a select few that have the potential to make a runaway move.
If you want to learn how to pick stocks like a top speculator then you will have to spend time learning the art of stock selection by determining what traits to look for in a winning stock pick.
Fortunately, there are a few critical success factors to select winning stocks that once you learn will help you pick winning positions with frightening accuracy that will shock other traders.
First, volume is to winning stocks what rocket fuel is to the space shuttle.
Price and volume have a strong relationship and move in tandem with one another.
When volume is rising then the stock's price movement will likely follow and when volume is declining or selling off then price will typically decline as well.
Use a 20-day moving average over the daily trading volume of a stock to determine whether its rising or declining in order to determine whether the stock is moving at a health pace which indicates to you that it has a strong investor following and is likely a good investment.
Next, pick stocks that trade at high prices.
It takes a lot for a $20 stock to move to $30 than it does for a stock that is priced at $200 to move to the $300 price level.
The reason for this is that the high priced stock typically has a strong following and rising volume to handle the massive buying and selling that comes with it.
Third, pick stocks that have strong bullish features in its daily trading such as wide range bars which are daily trading bars whose daily price action is 2 to 3 times the normal 10 true average range.
This type of daily price action reveals herds of traders and investors that are all buying at the same time because they believe the stock is getting ready to make a big run favorable to their direction and are not wanting to get left behind.
As a result, all the massive buying at the same time reveals to you that there is a strong investor following and the stock is under accumulation causing it to rise in price.
Finally, for the types of stocks that are traded most, you want to pick stocks that have strong fundamentals like Return On Equity, rising annual sales revenue, strong quarter over quarter growth, strong competitive advantages in their market place, and more.
In the long run, you can't outrun a stock's fundamentals because if they are good, then they will rise in a bull market.
However, in a bad market, if their fundamentals are bad, they will fall like a rock no matter how compelling the price action may be in the moment.
In the U.
S.
alone, there are over 8,000 publicly traded companies and countless more around the world but, out of that number, there are only a select few that have the potential to make a runaway move.
If you want to learn how to pick stocks like a top speculator then you will have to spend time learning the art of stock selection by determining what traits to look for in a winning stock pick.
Fortunately, there are a few critical success factors to select winning stocks that once you learn will help you pick winning positions with frightening accuracy that will shock other traders.
First, volume is to winning stocks what rocket fuel is to the space shuttle.
Price and volume have a strong relationship and move in tandem with one another.
When volume is rising then the stock's price movement will likely follow and when volume is declining or selling off then price will typically decline as well.
Use a 20-day moving average over the daily trading volume of a stock to determine whether its rising or declining in order to determine whether the stock is moving at a health pace which indicates to you that it has a strong investor following and is likely a good investment.
Next, pick stocks that trade at high prices.
It takes a lot for a $20 stock to move to $30 than it does for a stock that is priced at $200 to move to the $300 price level.
The reason for this is that the high priced stock typically has a strong following and rising volume to handle the massive buying and selling that comes with it.
Third, pick stocks that have strong bullish features in its daily trading such as wide range bars which are daily trading bars whose daily price action is 2 to 3 times the normal 10 true average range.
This type of daily price action reveals herds of traders and investors that are all buying at the same time because they believe the stock is getting ready to make a big run favorable to their direction and are not wanting to get left behind.
As a result, all the massive buying at the same time reveals to you that there is a strong investor following and the stock is under accumulation causing it to rise in price.
Finally, for the types of stocks that are traded most, you want to pick stocks that have strong fundamentals like Return On Equity, rising annual sales revenue, strong quarter over quarter growth, strong competitive advantages in their market place, and more.
In the long run, you can't outrun a stock's fundamentals because if they are good, then they will rise in a bull market.
However, in a bad market, if their fundamentals are bad, they will fall like a rock no matter how compelling the price action may be in the moment.
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