Do people like to keep their favorite day or swing trading stocks a secret?
Question by FUHummer: Do people like to keep their favorite day or swing trading stocks a secret?
There always seem to be a certain percentage of people here asking for advice on which stocks are “good” stocks to invest in. My question is: if people, particularly short term investors like day and swing traders, have “favorite” stocks that they like to play around with because they get good returns from them on a fairly consistent basis….are those people hesitant to tell other people about these stocks? Do they have a desire to keep them secret?
If so, is this based more upon superstition than anything else, or is there a good financial reason not to have a lot of other people know about, or get involved with these same stocks? Are they afraid, for example, that if more people, like novice investors, for example, who just like to hold onto stocks for long periods of time get involved with their favorite stocks, that the trading volume of the stock would be adversely affected so that the stock wouldn’t have as much up and down movement on a daily basis for example, thus making it less desirable for day or swing trading???
In other words, is there a fear that if the general multitude finds out about your favorite stock that you regularly trade and they decide to buy into it, that they could mess it up somehow, and if so, how would that happen?
Best answer:
Answer by Brian
I am just starting to trade myself so there’s only so much I can answer here. It does seem that very successful traders are reluctant to share their so called secrets. However, it has to do with pride and ego and not being afraid novices like you will “ruin the party”.
If anything, the more people who invest, the more profit for these traders there is to make. More investors will only mean more liquidity which makes it easier to enter and exit trades, thus facilitating their trading.
Think of it like this: if you were an expert poker player and a bunch of novice poker players joined the game and put their money in the pot, wouldn’t you want more rather than less of them there considering it’ll mean you’ll get to take more people’s money?
There really is no such thing as it being bad for there to be a ton of people invested in a stock. It only means more profits for those who know what they’re doing.
Know better? Leave your own answer in the comments!
There is no such thing as a favorite stock. It all depends on what a person is comfortable with. Some people are comfortable with oil, which is in energy, some technology and some precious metals. Some one who knows about oil wells, drilling for oil etc. wouldn’t be interested much in Apple computers and probable isn’t going to discuss how they get all the oil from a well, what’s going on in the Middle East etc or even how great the sales of IPADs are to share secrets, if there was any secret.
There is no such think as a stock companies. It does seem that very successful traders are reluctant to share their so called secrets.
No they dont. They like to tell people. When you tell people which stock you buy, you increase the demand of that stock, and because there is only limited supply, the price of the stock increases. This enables you to sell at a higher price than you bought. But what if people crowded your favorite stock and increased it’s price? You won’t be able to buy at a low price.