Because the ranges are often limited the RR is tied and limited too. The weaker the cent range the less RR by default. If you try to place two, three, four+ trades on single ticker that impacts you. If you take only single big swing trade it doesn't.
2.
2.
Many traders try to extract multiple separate trades from the movements of single ticker. This exposes you to behaviors. The weaker your read is the more you are impacted over long run negatively. Low RR trades and weak read leads to difficulty.
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3.
To avoid this some trade to extract only one trade out of ticker.They know their behavior read is not good enough so they compromise. Scale in going for one trade. This brings whole different can of worms with it, but that's not the focus of this thread. Back to multi-trades.
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4.
Extracting higher RR trades from weak volatility requires you to figure out somewhat decently where local tops and bottoms will be. Forget about that "nobody can time the market" phrase. If you play this way you will have to develop read on it.
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5.
I think this is where roads split for many. They are unaware just how much this is true. How important read on tickers is over long run. It is dismissed because it seems to be too challenging task to figure out behavioral patterns at least somewhat good. And it is.
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6.
This is why strong cycles and ignitions cause so much damage along with neutral cycles that chop traders in range bound 0 volatility tickers. The issues all have the same center. All roads lead to Rome. Recognition of behavior change.
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7.
Every trader should have goal to figure out behavior, study price action, performances of tickers on weekly basis, disconnects of past behaviors. Keep in mind it's all about details. The differences aren't night and day. Plus minus 30% is average no more.
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8.
This route is required if you try to short local top, cover local bottom and repeat this trade three times on same ticker. Regardless of what you think your ability to read behavior and orderflow will play major role long term. Large chunk of traders try to go this route.
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9.
All easy info out there won't get you much read on behavior (finviz stuff f example). Behavior is in themes, repetitions, basically research you have to do by yourself as there is no good content online about it for smallcaps. Not precise one at least.
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10.
To return to primary point: weak cent range tickers (often cheaper). If your behavior skills are weak, do not trade those.
Focus on higher volatile (5 bucks-ish) tickers as they provide more volatility and RR control.
11.
Focus on higher volatile (5 bucks-ish) tickers as they provide more volatility and RR control.
11.
But at the same time super high volatile (10 bucks plus) have their own trap speciality: Traders often tend to oversize them by not being careful. High volatility and low read on behavior combined with too much size=troubles. So both extremes have their own problems.
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12.
Either way figuring out behavioral similarities and patterns is something that in smallcap trading you do need for long term stay if extracting multiple trades from single ticker is your goal.
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