illiquid trading stocks

Not sure whether any here trade illiquid stocks interesting article.

Illiquid stocks usually have bigger ticks than more fluid stocks, but generate larger gains with less volume. Less volume means that it takes less to push a stock up than it does to push a heavily traded stock. Trading illiquid stocks can help improve your trading and make a trader more knowledgeable on the effects of volume. Illiquid stocks can help investors reach trading goals much faster as each movement is much larger than the movements in high volume stocks.

The basic trading fundamentals, such as earnings reports and price to earnings ratios, are much easier to comprehend and apply to these stocks than technical analysis. Fundamentals work over the long term much better, as they show real value of a company rather than the day to day trading range. While not completely custom indicators, a long term PE reference will help you determine if the stock is oversold or overbought much better than the technical analysis counterpart, the RSI.

Low volume stocks need less attention than the ever changing favorites like the QQQQ or common ETFs. The price action of penny stocks, low volume stocks, and other illiquid investments is much more contained and infrequent, allowing a trader time off in between trades. Proven strategies like earnings reports and fundamental analysis works well on the lower volume stock, and for long-term investors, the most illiquid stocks are the best.

From streetdirectory.com