This is the weekly recap for the week of 8/25
Overall weekly accuracy 60% APPT 2.6%.
This week was my second week venturing into slightly larger cap stocks. These are stocks that have a price per share in the $10-$70 range. I am still testing the waters with this trying to limit my maximum loss to $1000 per launch, so in general I will not be risking more than $0.4 per trade while still maintaining 2500 shares per launch. If I find a technical support level less that $0.4 cents away, I will still honor that support level to tighten the loss rather than allow for the full $0.4.
So the question is why I am moving over more to the larger than $10 stocks ? Well, as you may have heard, institutional investors and large fund managers are not allowed to trade in stocks less $10 per share although some still do. It is almost certain that these investors can not trade in stocks less that $5 price per share. That means when you trade at these levels, you are at the mercy of market makers and other less experienced traders. Emotions become the name of the game and it is very tough to extract profit.
Larger cap stocks have institutional traders in play which makes it less unpredictable and volatile giving us small traders a little bit of stability and improving the probability of making profits. Of course the normal rules of technical analysis and risk management apply in this case.