minimum stock value for day trading?

[brett]

I have recently read a review from someone who attended a day trading (stocks) seminar who said he learned to only trade stocks valued at over 30.00. Another trader said he starts them at 20.00. Neither one gave a reason but I would be interested to know how some of you feel about that and what would be the reasons why. I can understand needing a minimum amount of volume for liquidity but what is the deal with the value? Your thoughts? Agree or disagree? Again, these are for day trades only.

Brett

 

[songcon]

I have recently read a review from someone who attended a day trading (stocks) seminar who said he learned to only trade stocks valued at over 30.00. Another trader said he starts them at 20.00. Neither one gave a reason but I would be interested to know how some of you feel about that and what would be the reasons why. I can understand needing a minimum amount of volume for liquidity but what is the deal with the value? Your thoughts? Agree or disagree? Again, these are for day trades only.

Brett

I believe the reason behind the theory of minimum value is trying to stay away from penny stock players, to avoid the irrational moves.

The full service brokers are those who advise people to stay away from penny stocks for a good reason. Just give an example, one of the new clients call in and ask the broker that his cousin said the penny stock ABC is good, what do you think? Even if he totally believes in the recommendation, the broker would try his best to discourage the client to call for such question in penny stock in the future since the rate of bad pick is fairly high, and it's the easiest cause for the broker and his firm to get into trouble.

William O'Neal recommends stocks should be value of at least $15, the volume should be XXX shares traded per day.

Most day trading courses advise students to close their positions at the end of the day is another reason that they try to stay away from the pow price stocks, just watch the moves of BBI and SIRI in the last hours in the days that they have the hot news you can see the pictures.

To assume it up, the day trader trainers try to teache a science (in their thinking), and they don't want the novices to spoil their games, that's my interpretation.