Volumen or Float?

[jefreunde74]

Hi! Folks
This is my first post so wish me luck
i think i just heard from one of the videos of Timothy Sykes that he didnt want to be no more than 1% or 2% of the volumen? or the float?
what do you think? what would you suggest?

thanks in advance

Juan

 

[Rhody Trader]

Are you asking whether Tim is talking about volume or talking about float?

 

[jefreunde74]

Thanx Rhody for the answer
I heard from one of the Tims videos that if he wants to buy a stock, for instance 20000 dollars of investment and each share is 1 dollar, the volumen should be around 2M (1 or 2 percent)
So i dont exactly remember if he said the volumen or the float
Could you tell me what is the right thing to consider? What would you suggest?

 

[Rhody Trader]

I'm sure Tim is referring to volume, not float. Volume determines liquidity and that is almost certainly what Tim is concerned with.

 

[safvan]

Volume and float are two different things. A lot float stock with high volume makes big moves as it takes less exchange of shares to move the prices up and down. If you look good quality low float stocks (under 25 mil but under 10 mil are best) and then follow your strategies on them then the chances of big massive moves on them increases.

 

[jefreunde74]

hey! folks and thanx for your support! i appreciate that
but to go further id like to know this
if i saw a stock when the nyse market open up at 930 and that stock is selling at 1 dollar each share and the volumen at this time is for instance 30K, will i make a distortion in the market if i wanna buy 20K dollar on that stock eventhough the volume will end up at around 1M that day? am i clear?
so when Tim says 'im not gonna be more than 2% of the volumen, is he referring himself of the 3 month average volumen that you can get that information from yahoo finance statistics for instance?

i look forward for your help
Thanx
Juan

 

[safvan]

Juan

Stay away from $1 stocks if you are just starting out. This is the classic mistake lot of newbies do. I along with many others on this forum and others have done it in early part of our careers.

Unless you have at least 1 year experience in dealing with the stock market profitably you need to stay away from stocks that are below $30.

Buy and sell good companies that have their stock prices $30 onwards and take your account from $10k or $20k to a good size. Become confident and then venture into cheap arena.

Low cost stocks are quite easy to manipulate. I can put in $500k and take $1 to $10 in a day or two and then dump it all to newbies like you. This is the classic trap these penny stock type companies do.

Unless you personally know the management and studied their business portfolio and are confident that large commercial traders are going to be buying into these stocks into the future you are simply giving away your money to the large stake holders in that company. You are better off giving it away to a charity.

Study study.

 

[Rhody Trader]

so when Tim says 'im not gonna be more than 2% of the volumen, is he referring himself of the 3 month average volumen that you can get that information from yahoo finance statistics for instance?

I don't know if Tim actually uses a specific average, but I'm sure he's referring to daily total volume, and not volume up to a certain point in the day.

That said, 20k shares in one shot could move the market. It depends on how deep the market is at that time you try to put the trade through.

 

[jefreunde74]

Hey! Folks thanx for your help! I apreciate that
Safvan you are right i know that pennies are so volatile but im not concern about 0TCBB or Pink Sheet stocks. Tim advices you to use ClearStation web site and i do use its porcentage gainers losers and most active. I have read several books about candlesticks pattern incluiding Steve Nisons and i help my strategies with some western indicators like RSI and MCD. I am doing some paper trading for six month now but i know that i need some more tips, im about to open up an account on Ameritrade
So id really like if you want to share some thought about stocks in any chat messeger, my hotmail is
[email protected]
See you
Juan