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How To Trade Low Float Stocks

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So, you might have heard a lot about low float stocks. What are they, why are we so interested? Why are they the buzzword? Today, I’ll talk about that.

We Gonna talk about low float stocks. It’s a hot trend the last couple years and really has always been a hot trend, Ever since the beginning of my day trading career, 10 years ago, and going back even further, but it’s kind of interesting is, being a market participant, being in the markets every day, it’s definitely entered the zeitgeist in the last couple years.

It’s really gotten way more mainstream that people are talking about low float stocks and trading low float stocks.

So, what is a low float stock and why do we care?

The best way to think about it is, remember, the stock market is based on supply on demand. A lot of people never really think back, why do stocks move? Why do they go up? Why do they go down?

Remember, it’s a stock market, it is a market. There’s buyers, there’s sellers. There’s supply and there’s demand. And just like if you’ve had a, I’m sure most of you have had a high school or college economics course, ultimately, economics, you boil it down, it’s all about supply and demand.

Low float stocks, that means the float is a small amount, typically in most trading circles, less than 10 million freely tradable shares is considered a low float stock. That float is the amount of shares that are publicly traded that aren’t held by insiders, aren’t locked up by say compensations plans, et cetera.

So, what does that mean?

That means that the supply of freely tradable stocks, shares is less than 10 million. If you get a stock that’s trading 20, 30, 40, 50 million shares a day, think about that supply and demand.

If there’s only 10 million of them, but they’re changing hands 50 million times a day, that means that float is rotated five times. That means those shares are rapidly changing hands because there’s huge demand.

That means, basic supply and demand, that price is gonna potentially escalate very quickly. Think about if you’ve got 10 million of something, and people want 50 million of it, the price of that, whatever it is, apples, oranges, whatever it is, the price is gonna go up.

That’s why we look for these low float stocks. Especially if there’s news, especially if there’s media mentions. If there’s a media mention, mainstream media of a low float stock, that’s potentially millions of people that want 100 shares, a 1,000 shares.

It’s not hard for that float to evaporate very quickly. The beauty of AnjayToTrade, and these are features that I have specifically requested that we’ve put in that other professional traders like Tim Sykes, Tim Gritanni, have asked to put into AnjayToTrade, is scanners specifically developed to target these low float stocks.

There’s a lot of platforms out there, there’s free, there’s paid, none of them have the screeners and tools to spot these low float movers like we have. We’ve got built-in criteria, we’ve got pre-built scans. We’ve got Oracle, our stock trading algorithm that targets low float stocks. We’ve got a news screener that allows you
to filter for these types.

‘Cause remember, the beauty of low float stocks, they’re very news friendly, they move quickly on any sort of news. Lots of times can be pretty sketchy or suspect news, but if there’s news they move big because of that supply and demand type idea.

So remember, low float stocks very volatile. If you’re new, take advantage of the AnjayToTrade paper trading platform to test these. It’s always a great way to try trading these without risking real money.

But, if you’re looking for quick gains, especially in the day trade world, long and short, scan for low float stocks, scan for those ones with news, and these are the ones that have the potential to move 10, 20, 50, 500% a day.

Thank you for reading our articles. We really wanna help you learn, grow, and evolve, and become a consistently profitable trader. We’re proud of the tools we’ve build in AnjayToTrade and wanna help you maximize your success.

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