The stock market can be a great place to invest money and grow wealth. However, it can also be a complex and ever-changing world, making navigating difficult, especially for novice investors. Identifying stocks with high volume and rotating float is one strategy that can help investors succeed in the market. And to give you the perfect introduction to this trick, we’ll dive into the brain of David Rojas, founder, and CEO of Blue Castle Ventures LTD. He’s a graduate of Harvard Business School, so you can be sure he knows what he’s doing.
What are High Volume Stocks?
High volume refers to the number of shares of a particular stock traded in a given period. A high volume indicates that many investors are buying and selling that stock, which can result in greater liquidity and price stability. On the other hand, low volume can indicate a lack of interest in the stock, leading to greater price volatility and higher risks for investors.
Rotating float refers to the portion of a company’s shares available for trading on the stock market. A company’s float can change over time as shares are bought and sold. Identifying stocks with a rotating float can help investors identify actively traded companies with a strong market presence.
Now that we are done with the dictionary interpretation of these terms let’s explore the perspectives of David Rojas.
How to Identify High Volume and Rotating Float Stocks
In a world where David Rojas complains about how many people “just to throw in the stock market without knowing what they were doing, using free apps like Robin Hood,” which aren’t “good enough for newbies – the new ones,” it’s essential to have a good research approach. One such research activity to perform is picking stocks. According to David, “people focus more on percent gainers, and I focus more on volume, and these allow me to get in and get out with bigger positions and faster.”
David Rojas does momentum trading, where he’s “basically looking for stocks that rotate their float.” Always look for the “biggest volume during the day and identify the hot sector.” To do that, here are some strategies to employ:
Use technical analysis
According to David Rojas, when investing in assets like cryptocurrency, making ” technical analysis is essential because that’s the only analysis you can make.” Technical analysis involves analyzing charts and using technical indicators to identify stock price movement patterns. One such indicator is the volume indicator, which measures the number of shares traded in a given period. A spike in volume can indicate a potential trend reversal or a breakout, making it a good time to buy or sell a stock.
Monitor market news and trends.
Keep an eye on the latest market news and trends to identify sectors or industries experiencing growth or are likely to do so. This can help you identify companies with high potential for growth and a strong market presence.
Though, the news can sometimes be a late indicator for investment, as they may be delayed a couple of days, as David rightly points out from his experience. “I got wind of Uranium; it started to go up, so I invested in that. And I learned that he was hoarding it to avoid tours to get it right. And when I finally finished my trade, a couple of days after, only then was it coming to the mainstream media “oh, uranium is going up.” So people go up, the company cash out, and the price falls. So it’s late, right?”
Diversify your portfolio
The Blue Castle Ventures LTD CEO warns that “it’s a big risk factor for people who have their money just invested in a hard portfolio” Don’t put all your eggs in one basket. Invest in a mix of stocks from different industries and sectors to reduce your overall risk.
Monitor your investments
Keep an eye on your investments and adjust your strategy as needed. Regularly reviewing your portfolio can help you identify areas of weakness and make informed investment decisions. According to David, “if you are not every day, sitting there listening to the market, you are not gonna be able to profit from it because now we are kind of entering into what is called a bear market, where liquidity goes out of the market to like from the stock market to other types of assets, like bonds or even commodities.”
Identifying stocks with high volume and rotating float is a crucial strategy for investors looking to succeed in the stock market. Investors can identify stocks with strong market presence and growth potential by using technical analysis, monitoring market news and trends, analyzing financial statements, and using stock screeners. However, having a solid investment strategy and staying disciplined and focused on long-term goals are crucial.