Look at the turn-over volume to find securities that fit your capital size. Turn-over (dollar) volume is calculated as price × volume.
As a rule, higher is better — more dollar volume means deeper liquidity, tighter spreads, and easier entries and exits without moving the price against you.
Once in a while your portfolio looks like Everest. In this rare situation, as an active trader, close some or all positions. Most likely, by experience, the quick gain will be corrected by a quick loss. Reset the setup and start fresh.
Do not trade or invest in a security or market where you cannot also go short.
A market is only as healthy as it is free. The ability to sell short is part of that freedom — it lets prices discover the downside as well as the upside. Every restriction (short-sale bans, trading halts, price controls, capital limits) makes a market a little less free, and a little less efficient. Pile on enough of them and price discovery breaks down, liquidity dries up, and the market eventually distorts or fails. If you are only allowed to bet one direction, you are not in a free market — you are in a trap.
Contrarian investing is characterized by purchasing and selling in contrast to the prevailing sentiment of the time. In short, do not follow the herd. Certain crowd behavior among investors can lead to exploitable mispricings.
Widespread pessimism can drive a price so low it overstates risk and understates recovery prospects — identifying and buying such distressed stocks, then selling after recovery, can lead to above-average gains. Conversely, widespread optimism produces unjustified valuations that eventually drop. Avoiding and short-selling over-hyped investments reduces that risk. These principles apply to a single stock, a sector, an entire market, or any asset class.
Standard schools teach you and your kids to function, pay tax and pay bills. For being a freeman, you need to look elsewhere — or educate yourself.
Do not hesitate to get in touch. EasyStockDater offers in-depth consulting on the above via on-site or off-site meeting. The fee is set according to your background and financial means.