Stock Picking: How to Pick Ready-to-Move Stocks

Not all stocks have the potential to move. That's why it'simportant to be able to filter out stocks that aren't likely tomove right away. After all, stock trading is about making moneyand it's difficult to make money investing on stocks that aren'tgoing to move anytime soon. If liquidity is what you're looking for, high priced stocks mayinitially draw your attention. You may appreciate the tradingvolume of pricy stocks. However, such stocks are less likely tohave the kind of price volatility you're looking for. Keep in mind that with penny priced stocks, the price may be toolow to have a trade volume that can support profitability. Ingeneral, keep in mind that the lower the price of the stock, themore difficult it is to trade for profit. The price of thesestocks may be all over the place, which has the consequence ofstressing out most traders as they watch their stock price varyall over the map. Use the Goldilocks rule when trading stock: some are too cheap,some are too expensive, but the stocks that are most likely tomove are just right. Making sure that the stocks you're tradingare in this range will ensure a return on your investment in adecent amount of time. Where does this Goldilocks range hit?Trading is different for everyone and this is true for findingyour ideal range as well. Nevertheless, a good stock picking price range can be as high as 20 dollars or aslow as 5 dollars. If the stock you're interested in is withinthat price range you're on the right track. Another important thing to check for is the trading volume ofthe stock that interests you. The stock trade volume should beat the highest 2 million and at the lowest 100,000. Keep this inmind when searching for stocks that are likely to move. The problem with stocks that are ready to move is that sometimesthey jump around a lot. In order to make sure you still make aprofit with your stock, watch it as it moves in the few minutesafter the market opens. Often, the high of the day will be setearly. If it looks like this applies, you can try having a sell limitjust below the high of the day. Of course, if it looks like theprice is approaching the high of the day with good momentumlater on, you should consider raising that limit price. Youmight also consider setting the stock's buy stop right below aparticularly significant low price. This is a much better technique than simply watching the stockconstantly with your finger on the sell button. Get somepractice finding the Goldilocks sweet spot and you'll soon findyourself trading in highly movable stock!