Floating stock

Содержание

Why Are Low Float Stocks Great for Trading?

One of the most common opportunities day traders search for every day is the low float runner.


Low float stocks are great potential trading candidates because they can be highly volatile. Savvy, prepared day traders can potentially grab moves of 10%, 20%, 50%, or more in a single trading session.

These wild moves come down to supply and demand.

When there’s more demand than supply, prices rise. If there’s massively more demand than supply, prices can move a huge amount.

Imagine a bunch of traders all want to trade the same hot low float stock — that’s the demand.

Since there aren’t many shares — the supply — available, the demand quickly outstrips the supply. The stock price takes off like a rocket.

Example of a Low Float Stock

Enough theory, let’s look at a real-life example of a low float stock — Francesca’s Holding Corporation (NASDAQ: FRAN).

Francesca’s Holding Corporation (NASDAQ: FRAN) is volatile low float stock (Source: StocksToTrade)

This stock has been mentioned a few times on our weekly watchlist (There’s no cost to sign up. Get our weekly watchlist in your inbox every Sunday.)

As of this writing, FRAN has a float of just 2.14 million shares. With such a tiny amount of shares freely traded, we’ve seen this stock make huge price moves around company-related news stories.

For example, we saw the stock more than double in price in a single day in early July. That’s why active traders love low float stocks…

What Is a Floating Stock?

Floating stock is the number of shares available for trading of a particular stock. Low float stocks are those with a low number of shares. Floating stock is calculated by subtracting closely-held shares and restricted stock from a firm’s total outstanding shares. Closely-held shares are those owned by insiders, major shareholders, and employees. Restricted stock refers to insider shares that cannot be traded because of a temporary restriction such as the lock-up period after an initial public offering.

A stock with a small float will generally be more volatile than a stock with a large float. This is because, with fewer shares available, it may be harder to find a buyer or seller. This results in larger spreads and often lower volume.

Key Takeaways

  • Floating stock is the outstanding shares minus those that are restricted, or held by insiders or major shareholders.
  • Floating stock will change over time as new shares may be issued, shares may be bought back, or insiders or major shareholders buy or sell the stock.
  • Low float stocks tend to have higher spreads and higher volatility than a comparable larger float stock.

1:35

Популярность

Идея нашла своих потребителей. Уже спустя незначительное время стоковый сегмент занял уверенные позиции на рынке. В Штатах и европейских странах люди беспокоятся о сохранении семейного бюджета, поэтому стоковый бизнес давно имеет большие финансовые обороты, составляя неплохую конкуренцию выпуску новых коллекций. Стоковые предприятия на просторах СНГ обрели популярность после финансового кризиса, ведь стоимость турецких и китайских товаров, которые ранее были дешевыми, значительно поднялась. Средний класс не мог позволить приобретать одежду по таким ценам. Покупатели узнали про сток, что такое предприятие позволяет значительно экономить средства.

2 Key Indicators to Check Before Trading Low Float Stocks

1.) High Volume

In the stock market, volume equals movement.

Volume is the number of shares of a stock traded during a period of time. It’s based on every transaction — for every buyer, there’s a seller. So every buy and every sell aren’t added to the volume separately but as a single transaction unit.

The bigger the volume, the bigger the potential for the overall move — particularly for low float stocks.

2.) News Catalyst

The fact that a stock is low float indicates that there’s a relatively small supply of stock shares available for trading. This means that the supply and demand can shift on a dime.

So when a juicy news catalyst hits, it can really move the stock in question, causing it to rapidly rise (or fall) in price.

Traders can potentially profit on the way up or down. It’s a matter of knowing which way the stock is moving and having a solid trading plan.

How can you use the news to your advantage? First, be sure to research the catalyst to see if the news has ‘legs.’ Cut through the BS of self-serving PR statements and find the real scoop yourself.

I use StocksToTrade’s Breaking News Chat. Two former wall street pros sift through news and alert members to items that have the most potential to move the stocks I like to trade. Not all news moves stocks — remember to react, not predict.

Also, back it up with research from earnings and the stock’s charts. Look for strong patterns.

A strong catalyst backed up with research can indicate a low float stock trading opportunity. I should add a caveat about rumors. Rumors can move stock prices, but you shouldn’t necessarily trust them! It’s all about preparation.

Whiting Petroleum Corporation Company Profile

IndustryOil & Gas Operations

SectorEnergy

Employees

505

Equity Type

ORD


Whiting Petroleum Corporation is an independent oil and gas company. The Company is engaged in development, production, acquisition and exploration activities primarily in the Rocky Mountains region of the United States. It is engaged in the exploration and production of crude oil, natural gas liquid (NGLs) and natural gas. Its Northern Rocky Mountains operations includes its properties in the Williston Basin of North Dakota and Montana targeting the Bakken and Three Forks formations and encompasses approximately 756,800 gross (476,300 net) developed and undeveloped acres. The Company’s Central Rocky Mountains operations included properties at its Redtail field in the Denver Julesburg Basin (DJ Basin) in Weld County, Colorado targeting the Niobrara and Codell/Fort Hays formations and encompasses approximately 96,400 gross (84,600 net) developed and undeveloped acres. Its other operations primarily relate to non-core assets in Colorado, Mississippi, North Dakota, Texas and Wyoming.

Read More

Example of Floating Stock

In April of 2019, General Electic (GE) had 8.71 billion shares outstanding. Of this, 0.16% were held by insiders. 58.64% were held by large institutions. Therefore, a total of 58.8% (5.12 billion) is likely not available for public trading, according to data from Thomson Reuters. The floating stock is therefore 3.59 billion shares (8.71 — 5.12).

It is important to note that institutions don’t hold a stock forever. The institutional ownership number will change regularly, although not always by a significant percentage. Falling institutional ownership coupled with a falling share price could signal that institutions are dumping the shares. Increasing institutional ownership shows that institutions are accumulating shares.

Understanding Floating Stock

A company may have a large number of shares outstanding, but limited floating stock. For example, assume a company has 50 million shares outstanding, with other institutions holding 35 million, management and insiders owning 5 million, and the employee stock ownership plan (ESOP) holding 2 million. Floating stock is therefore only 8 million shares (50 million — 42 million), or 16% of the outstanding shares.

Low float is typically an impediment to active trading. This lack of trading activity makes it difficult to enter or exit positions in stocks that have limited float.

The amount of a company’s floating stock may rise or fall over time. This occurs because companies may sell additional shares to raise more capital, or restricted or closely-held shares may come available. On the flip side, a share buyback decreases the number of outstanding shares, so floating shares as a percentage of outstanding stock will go down. 

A stock split will increase floating shares. A reverse split decreases float.

Conclusion

Low float stocks are stocks with a low amount of shares. The demand is typically higher than the supply so the price is increased. 

Given the right tools, these stocks are great for day traders because of their increased volatility because of the high demand. With that being said, what goes up must come down. As fast as low float stocks can go up, they can go down just as fast. 

News and Volume are good indicators of stock health and are important to monitor when looking to trade low float stock. Tracking movements and headlines could allow traders to maximize their strategies.

Benzinga Pro provides traders with news as soon as they hit the headlines as well as filters to find the information needed to stay up to date. 

Disclaimer: Benzinga is a news organization and does not provide financial advice and does not issue stock recommendations or offers to buy stock or sell any security. Benzinga Pro is for informational purposes and should not be viewed as recommendations. Benzinga Pro will never tell you whether to buy or sell a stock. It will only inform your trading decisions. You can find our full disclaimer located here. 

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Why Floating Stock is Important

A company’s float is an important number for investors because it indicates how many shares are actually available to be bought and sold by the general investing public. A company is not responsible for how shares within the float are traded by the public—this is a function of the secondary market. Therefore, shares that are purchased, sold or even shorted by investors do not affect the float because these actions do not represent a change in the number of shares available for trade, they simply represent a redistribution of shares. Similarly, the creation and trading of options on a stock do not affect the float.

Пожалуйста, помогите c переводом:

Policy – Forestry Commission England continues to take the lead on grey squirrel policy on behalf of Defra. Английский-Русский

Mendeleev was foreshadowed in his great generalization by De Chancourtois’s helix of elements of 1863, J.A.R. New-lands’s *law of octaves* (1864-5)-which uncovered periodicity in the 8th elements of his chemical groupings — and W. Odling’s work, which suggested that recurrent chemical properties in elements arranged according to atomic weight could not be accidental. Английский-Русский

1. The ENIAC (1943-1946) The first all-electronic computer, the Electronic Numerical Integrator and Calculator (ENIAC) was developed at the Moore School of Electrical Engineering of the University of Pennsylvania. It was developed as a result of a military need. J.Presper Eckert and John Mauchly proposed the machine to solve the problem of calculating firing tables for new weapons. The ENIAC weigh Английский-Русский

Giving a definition of the term “comedy”, one may face some difficulties as it’s one of the most complex categories of aesthetics. Comedy is historically volatile, it depends on the context and has a social nature. The laughter is not always a sight of comedy, and comedy is not always defined by laughter. It is circumstances, sharpening the contradictions and helping to reveal its social nature Английский-Русский

What’s Considered a Low Float Stock?

What does low float mean in the stock market? Low float stocks have a small number of their shares freely available for trading.

The stocks can often be highly volatile with the potential for tremendous trading opportunities. If you day trade or want to day trade, you need to understand how low float stocks work. Let’s first start with…

Outstanding Shares

On a company’s balance sheet, under the “Capital Stock” section, you’ll find the number of shares outstanding. That’s a company’s entire collection of shares. For example, a stock’s price may be $10, with the total amount of outstanding shares being one million.

This means that there are one million shares, each worth $10, giving the entire company a value (also known as the market cap) of $10 million.

But for most stocks, not all shares can be freely traded. Often, company management, employees, and major investors have a chunk of restricted stock or shares that they can’t sell.

For example, sales managers may receive shares as part of their compensation on top of a salary, but they may not be allowed to sell them for a few years. Those shares count as restricted stock.

Floating Shares

The shares that can be freely bought and sold are referred to as ‘floating shares’ or ‘the float’.

Anyone can buy these shares — individual traders or investors, investment firms, banks, or trading groups. And shareholders can sell these shares at any time.

A Quick Note on Low Float Stocks

Wondering where you draw the line between a low float stock, medium float, or larger float stock?

Here’s the general rule in the day trading community: a stock with a float of 10–20 million shares or less is considered a low float stock.

Варианты решения

Первый вариант — оставить одежду на складе. Второй — вывесить обратно на продажу. Ни один из предложенных исходов не нравится торговым предприятиям по ряду причин. За время распродаж можно продать небольшую часть коллекции. Если в одном торговом зале остается и новая коллекция, и непроданный ранее товар, покупатели чувствуют себя неловко. Кто-то считает понижением своего статуса покупку скидочного товара, кто-то предпочитает не заходить в магазин с распродажами. Притом, ценовая политика бренда становится необъяснимой для покупателя. Рядом расположены товары одинакового качества, но с большой разницей в стоимости. Это отрицательно отражается на репутации компании. Еще одно негативное последствие совмещения коллекций — пустая трата места в торговом зале. Одежда выпущенных ранее коллекций снижает прибыль магазина с единицы площади торгового зала. Непроданный товар замораживает финансы, которые могли бы принести куда большую прибыль вне товара.

5 Low Float Stocks to Watch in 2020

These stocks have a low float and had a run-up in 2020. Check these out so you can see the potential and prepare.

EKSO Bionics Holdings, Inc. (NASDAQ: EKSO)

On June 25, Ekso Bionics Holdings, Inc. (NASDAQ: EKSO) announced news about its FDA clearance to market its robotic exoskeleton device to patients with an acquired brain injury (ABI).

The stock’s float is just under 5 million shares. In premarket, the stock was in the $3s but by after-hours, the stock was trading in the $10s. The volume was huge — 123 million.

See how fast these low floats move on news catalysts. Especially when the volume comes in…

Immuron Limited (NASDAQ: IMRN)

On June 9, Immuron Limited spiked on news that its research partner requested a meeting with the FDA to discuss a new drug to treat infections.

This stock’s float is under 2 million shares. Check out the explosive move on the chart. When it broke the days’ high in the afternoon, it squeezed out the shorts.

Carver Bancorp, In. (NASDAQ: CARV)

When Black Lives Matter protests were peaking in mid-June, a few stocks started running because of the companies’ business with Black Americans.

On June 17, CARV was one of these stocks. It traded a daily volume of 59 million shares and has a float of only 1.35 million.

Urban One, Inc. (NASDAQ: UONE)

Another stock running at that time was Urban One, Inc. This has a larger float of 21.48 million shares. On June 16, it traded a daily volume of 45 million shares.

The stock traded from the $4s to the $40s in one day. In the following days, the increased volume allowed for more trading opportunities.

The CARV and UONE run-ups are also good examples of sector momentum and how world events can affect the market. Learn more in my “How to Make Millions” DVD guide. (All proceeds go to charity.)

ARCA Biopharma, Inc. (ABIO)

ARCA Biopharma has a float of only 1.18 million shares. On May 28, the company announced it was developing a potential coronavirus treatment.


It traded a massive volume of 83 million shares that day and went from the $7s to the $20s. The next day, it failed. But this shows how news can bring in volume and create massive spikes on low float stocks.

52-Week High/Low Reversals

A stock that reaches a 52-week high intraday, but closes negative on the same day, may have topped out. This means that its price may not go much higher in the near term. This can be determined if it forms a daily shooting star, which occurs when a security trades significantly higher than its opening, but declines later in the day to close either below or near its opening price. Often, professionals, and institutions, use 52-week highs as a way of setting take-profit orders as a way of locking in gains. They may also use 52-week lows to determine stop-loss levels as a way to limit their losses.

Given the upward bias inherent in the stock markets, a 52-week high represents bullish sentiment in the market. There are usually plenty of investors prepared to give up some further price appreciation in order to lock in some or all of their gains. Stocks making new 52-week highs are often the most susceptible to profit taking, resulting in pullbacks and trend reversals.

Similarly, when a stock makes a new 52-week low intra-day but fails to register a new closing 52-week low, it may be a sign of a bottom. This can be determined if it forms a daily hammer candlestick, which occurs when a security trades significantly lower than its opening, but rallies later in the day to close either above or near its opening price. This can trigger short-sellers to start buying to cover their positions, and can also encourage bargain hunters to start making moves. Stocks that make five consecutive daily 52-week lows are most susceptible to seeing strong bounces when a daily hammer forms.

Why Should You Trade Low Float Stocks?

These stocks can move FAST with high volume. They can be great for long-biased traders, as they can have huge gains. Especially if there’s a catalyst and a short squeeze.

Low float stocks can be great for traders with small accounts … if they move in the direction you’re trading. For example, don’t short a low float on its first green day running on news.

Benefits of Trading Low Float Stocks

Here’s the thing: these stocks have limited supply. So any catalyst that leads to demand (or lack thereof) can have a larger effect on available shares. The stock can be more volatile.

So is good or bad for traders? Kinda both, actually. It simultaneously raises the risk and potential rewards. Let’s talk about the risks…

Risks of Low Float Stocks

The volatility with low float stocks means they can make rapid moves up or down.

Since there are limited available shares, news (good or bad) can drastically affect supply and demand.

These stocks are ripe for scammy campaigns like stock pumps and promotions. It’s smart to look at the fundamentals AND run technical analysis. Understand the stocks you trade.

Low floats are more common for micro- or small-cap companies. These companies aren’t as established as large-caps and tend to have more volatility and risk. The low float compounds the risk.

Potential Rewards of Low Float Stocks

The good news? Just about everything that makes these stocks risky can make them potentially rewarding.

Like I said, these stocks can make big moves. As a trader, you have to prepare to grab opportunities. You gotta be ready.

News is generally a catalyst for movement in low float stocks. You also need to keep tight watchlists. See how I build a watchlist every week for no charge. Sign up here.

What is a Low Float Stock?

A low float stock is a stock with a low amount of outstanding shares available. Outstanding shares are shares that are not reserved or claimed. Float refers to the shares that are available. One way to find float is to take the total number of shares and subtract the number shares that are already owned by insiders. Low float stocks typically have around 15 million available shares or less.

Low float stocks typically have higher spreads and higher volatility, because of this there is less supply and bigger demand so the price goes up. 

Stocks with a low amount of float have a constant fluctuation in price making them favorable with day traders because of the increased level of volatility. Traders who tend to purchase large quantities of stock could have leverage when trading stocks with low float because of how the price fluctuation. Knowing when to get out would be very important. 

Understanding the 52-Week High/Low

A 52-week high/low is a technical indicator used by some traders and investors who view these figures as an important factor in the analysis of a stock’s current value and as a predictor of its future price movement. An investor may show increased interest in a particular stock as its price nears either the high or the low end of its 52-week price range (the range that exists between the 52-week low and the 52-week high).

The 52-week high/low is based on the daily closing price for the security. Often, a stock may actually breach a 52-week high intraday, but end up closing below the previous 52-week high, thereby going unrecognized. The same applies when a stock makes a new 52-week low during a trading session but fails to close at a new 52-week low. In these cases, the failure to register as having made a new closing 52-week high/low can be very significant.

One way that the 52-week high/low figure is used is to help determine an entry or exit point for a given stock. For example, stock traders may buy a stock when the price exceeds its 52-week high, or sell when the price falls below its 52-week low. The rationale behind this strategy is that if a price breaks out from its 52-week range (either above or below that range), there must be some factor that generated enough momentum to continue the price movement in the same direction. When using this strategy, an investor may utilize stop-orders to initiate new positions or add on to existing positions.

Источники стока

Можно выделить несколько основных ресурсов стоковых вещей и соответствующим им видов:

  1. Перевыпуск на заводе или фабрике. Данный вид стока именуется заводским или фабричным. Он включает оригинальные вещи, которые по некоторым причинам не покинули склад фабрики. Могут возникать излишки товара, ведь после окончания партии остаются материалы. Они оплачены заранее, а просто продать их практически нереально, поэтому фабрика вырабатывает дополнительную партию одежды или обуви. Реализация таких вещей проходит через стоковые оптовые компании, которые напрямую без посредников скупают большие партии с фабрик. Также подобный сток может образовываться из-за отказа торговой сети от части партии или вообще от сотрудничества. Швейные фабрики, как и любой другой бизнес, нуждаются в оборотных средствах, поэтому товар необходимо сбыть. Стоковые компании скупают товар и продают его со скидкой.
  2. Сток оптом, сток дилеров. Это товар, купленный оптовыми закупщиками. Такая продукция была куплена оптовиками у официальных компаний. Последние не смогли продать товар полностью, а как известно, в европейских странах коллекция считается модной на протяжении трех месяцев, отдельные сети даже сокращают этот период от двух недель до месяца. Допустим, коллекция имеет девять тысяч единиц, а сети закупили всего пять из них. Компания вынуждена заниматься поиском новых связей или сотрудничать со стоковыми предприятиями. Необходимо проверять такой вид стока, ведь недобросовестные дилеры стараются продать сток пяти- или десятилетней давности.
  3. Складской сток. Что такое данный вид стока? Его следует выделить как отдельный. Можно относить к торговым сетям или дилерским остаткам. Сток превышает качество и комплектацию магазинного, он упакован, имеет бирки и не содержит мелкого брака, который может возникнуть в процессе примерки в магазинах. Важная особенность такого вида стока — наличие размерных сеток.
  4. Стоки торговых сетей. Основная часть стокового товара, которая прибывает в СНГ — именно этого типа. Западные страны также часто встречают этот тип товара. Это одежда, которая не была распродана в течение сезона и после окончания акций. Ее снимают и хранят на предназначенных складах, а затем она продается оптовым компаниям или отправляется в стоковые предприятия европейских стран.

stock

I. stock1 /stɒk $ stɑːk/ ‘British English’ ‘American English’ noun

[Language: Old English; Origin: stocc‘tree-trunk, block of wood’]

1. IN A SHOP a supply of a particular type of thing that a shop has available to sell:

We have a huge stock of quality carpets on sale.

Buy now while stocks last!

out of stock/in stock (=unavailable or available in a particular shop)

I’m sorry, that swimsuit is completely out of stock in your size.

2. FINANCE

the trading of stocks and shares

3. AMOUNT AVAILABLE the total amount of something that is available to be used in a particular area:

Cod stocks in the North Atlantic have dropped radically.

the stock of housing in rural areas

4. SUPPLIES a supply of something that you keep and can use when you need to

stock of

He keeps a stock of medicines in the cupboard.

The country has been building up its stock of weapons.

5. take stock (of something) to think carefully about the things that have happened in a situation in order to decide what to do next:

While in hospital, Jeremy took stock of his life.

chicken stock

vegetable stock

7. GUN the part of a gun that you hold or put against your shoulder, usually made of wood

8. ANIMALS farm animals, especially cattle SYN livestock

9. the stocks

a) a wooden structure in a public place to which criminals were fastened by their feet or hands in the past

b) a wooden structure in which a ship is held while it is being built

10. sb’s stock is high/low if someone’s stock is high or low, they are very popular or very unpopular:

Simon’s stock is high in the network news business.

11. stock of jokes/knowledge/courage etc the jokes, knowledge etc that someone knows or has:

John seems to have an inexhaustible stock of funny stories.

12. be of Scottish/Protestant/good etc stock to belong to a family that in the past lived in Scotland, were Protestants, were respected etc

13. FLOWER a plant with pink, white, or light purple flowers and a sweet smell

14. PLANT a thick part of a stem onto which another plant can be added so that the two plants grow together

II. stock2‘British English’ ‘American English’ verb

1. if a shop stocks a particular product, it keeps a supply of it to sell:

We stock a wide range of kitchen equipment.

2. to fill something with a supply of something

stock something with something

Our refrigerator at college was always stocked with beer.

stock up phrasal verb

to buy a lot of something in order to keep it for when you need to use it later

stock up on

I have to stock up on snacks for the party.

III. stock3‘British English’ ‘American English’ adjective

1. stock excuse/question/remark etc an excuse etc that people often say or use, especially when they cannot think of anything more interesting or original – used to show disapproval

2. stock item/size something that is available in a shop and does not have to be ordered

What Are Low Float Stocks?

Before you can understand stock float, you need to understand shares outstanding.

The term ‘shares outstanding’ refers to all of a company’s shares. That includes restricted shares, which are held by company insiders, execs, and institutional investors. This stock can’t be freely traded.

If you’re looking at a company’s balance sheet, you can find the number of shares outstanding listed by the heading “Capital Stock.” Shares outstanding are a key piece when calculating a company’s market cap and earnings per share (EPS).

Then there’s the float.

What Are Float Shares?

The float refers to the number of shares that are freely available for trading.

Even if a company has a massive amount of shares outstanding, if a lot of them are restricted, everyday traders can’t trade them.

If the number of shares available to trade is fairly low, the stock has a low float.

There isn’t a specific number that denotes a low float. But a lot of traders consider a stock with 10 million shares or less freely available for trading a low float stock.

Confused? Don’t be. Check out this video where I break it down more:

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Apple 497.48 499.47 477.00 +24.38 +5.15% 84.51M 15:59:59
Tesla 2,049.98 2,095.49 2,025.05 +48.15 +2.41% 21.49M 15:59:59
Boeing 167.50 170.08 167.27 -2.08 -1.23% 16.95M 15:59:59
Microsoft 213.02 216.25 212.85 -1.56 -0.73% 36.25M 15:59:59
267.01 270.49 266.42 -2.00 -0.74% 15.54M 15:59:59
AMD 83.81 84.41 82.23 +1.04 +1.26% 48.28M 15:59:59
Visa A 204.13 205.14 203.34 -0.02 -0.01% 10.00M 15:59:59
NVIDIA 507.34 512.35 487.81 +21.70 +4.47% 25.00M 15:59:59
Exxon Mobil 41.01 41.34 40.71 -0.31 -0.75% 25.52M 15:59:59
Amazon.com 3,284.72 3,314.40 3,275.39 -12.65 -0.38% 3.58M 15:59:59

My Favorite Low Float Stock Screener

Here are some of my go-to resources…

StocksToTrade


I helped design the StocksToTrade platform for screening AND trading. It’s designed for the low float and low-priced stocks I like to trade. You can use StocksToTrade to scan for low floats, and the float displays in charts, watchlists, and more.

I use this tool every day. Learn more about StocksToTrade here.

How to Find Low Float Stocks on Thinkorswim

TD Ameritrade’s thinkorswim is another common trading platform, but it doesn’t come with a built-in scan for stock float.

So you’d have to invest in an add-on or do your own research. But once you find low float stocks, this platform has plenty of tools for further analysis.

How to Find Low Float Stocks on Finviz

Finviz is a free website for stock info and news. It has a free built-in screener, including for float size. This can be a good tool for beginners.

How to Trade Low Float Stocks in 5 Steps

Here are five key steps to help you trade low float stocks.

Let’s break it down.

#1 Common Stock Patterns and Technical Analysis

When seeking low float penny stocks, do as you would when researching any penny stock: Look for common patterns and run technical analysis.

As a trader, I rely more on technical analysis than fundamental analysis.

I trade by patterns, numbers, and proven trends — not on gut instincts or rumors. It keeps things simple and helps me focus.

When it comes to technical analysis, different traders use different tools. You have to find what works for you. Past experience is key. That’s why I tell my students to study the past. History repeats, and I’m really just a glorified history teacher.

Want specific tools? Read more about technical analysis tools here.

#2 Fundamental Analysis

I may focus more on technicals…

But I don’t totally skip fundamental analysis. It can be just as important. It’s where you look at the company behind the stock and its financials.

Earnings reports can give you valuable insight into how a company handles its finances and debt. You can also read commentary from high-ranking company execs.

To understand fundamental analysis, you need to know a few basics about business finance. Things like operating income and financial statements. Get familiar with these concepts. You can start with this post.

#3 Create a Low Float Stock List

There are thousands of stocks out there. So how do you determine the top contenders to trade? Your watchlist.

Need a starting point? You might consider using the method of one of my most successful students, Tim Grittani.*

From there, he goes through every stock on the list and looks at the daily charts for patterns. He’s looking for the strongest contenders.

It’s a good habit to follow. It’s how you can narrow down your choices to the best stocks for your strategy.

Having trouble with your watchlist? Answer the following:

  • Which patterns have you had the most success with? (Don’t know? You need this.)
  • Where’s the most volatility (and potential)?
  • Which way is the stock gapping premarket?

#4 Look For Low Float Stocks With High Volume

Always look at volume. Especially with low float stocks.

With the lower supply in low float stocks, volume can be a powerful indicator for price action. 

If you don’t have enough volume, you can get stuck in a trade. Don’t be that trader.

#5 Keep on Learning

Repeat after me: I will never stop learning.

As long as you trade, you must be committed to learning.

The market’s not static. If you want a long-term trading career, you too need to continue to change and adapt. You need to put in the work, test your theories with paper trading, and refine your methods over time.

You may find a setup that works over and over. But then one day, it stops working. That’s how the market works.

The market in 2020 has been crazy. There have been tons of plays, long and short. I created my no-cost “Volatility Survival Guide” to help you learn to navigate this crazy market.

Trading Challenge

Want to kickstart your education and avoid common trading mistakes? Consider applying for my Trading Challenge.

You’ll learn from me and my top students — and have access to an amazing trading community.

I teach so I can give my students the knowledge I never had when I started out. It’s how I pay it forward and help others realize their trading potential.


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