Day trading pre-market open February 7, page-25

Morning all. I'll just throw in my 2c about big caps vs specie's.

I don't disagree with the idea of trading the big caps . . . but . . . imo

1. The margin return on the speccys is way higher and more than compensates for the slight increase in risk.

2. Species aren't that risky. Following the chart and using basic commonsense keeps you out of the rare times that a speccy will crash during a DT. In fact, other than surprise CR, I can't ever recall getting caught. Peeps who complain are usually sitting on a loss and don't sell cos they think they will get their $$$ back. I was trained up in the old days when failed species went away to die but I agree that punters do hang on longer these days so sometimes you can be lucky. But sell when the trade is against you and make sure there is enough volume to trade before you enter.

3. Big caps can be very risky. AMP anyone? I recall more of these having sudden crashes that have trapped punters. ERG and way back One-Tel for eg. And the returns on BHP are pitiful really. That said I once shared a ski lodge with some peeps from COH who told me to get in at $4. "Nah, I don't like high priced stocks." lol

Main rule is to check the charts and understand why the SP is moving but take any opportunity that comes along.

Happy Trades