Deciding What and When to Buy
What to Buy Day traders seek to make profit by taking advantage of the smallest price fluctuations in individual assets (stocks currency, currencies, futures and even options). They typically utilize huge amounts of capital to accomplish this. In deciding which stock to buy, a stock for example, a common day trader will look for three aspects: Liquidity. Liquidity permits you to purchase and sell it with ease and hopefully at a fair price. Liquidity can be a benefit with small spreads which is the gap between the price of the bid and price prices of a security and also for the low slippage which is an amount that is different between anticipated price of a transaction and the actual value. (Hassanworld) Volatility. It is a measurement of daily prices range - the interval within which a trader works. Greater volatility implies greater opportunity to make or lose money. Trading volume. This is the frequency at which an investment is purchased and sold during a particular time frame....