Putting the wind at your back
Small Caps Trade Triggers
The vast majority of Retail Traders simply trade big cap stocks. The reason being is the way they rely (mostly) on information for selecting stocks to trade. It is also because of relying upon Market, Industry, Sector way for scanning for stocks far too frequently passing up on the fundamental stocks that are shifting upward with momentum but aren't a significant index component.
However, with the experience of InvestmentSky.com, you can easily discover stocks for trading the small caps that are positioned to push higher with considerable momentum increases
The key reasons why you should trade small caps stocks? Considerably more specialists are trading small caps because of the new guidelines for spreads on small cap stocks. This is exactly the reason for a recently available change to the inner Market Structure that lots of Retail Traders have not heard about.
For what reason do small caps possess this kind of huge sudden momentum flows? Small caps will often have much less outstanding shares when compared to a big cap.
Apple, for example, has a higher amount of outstanding shares, additional customers are needed to move the shares with momentum. With a small cap under Silent Accumulation, the limited amount of available shares can boost momentum tremendously as demand instantly rises - it generally does not take nearly as many buyers to create large momentum swings
in small caps. These benefits can frequently be huge during extremely speculative runs. That is because of the limited amount of shares open to trade.
When supply is smaller, demand raises significantly and momentum flows occur. The added advantage of wider spreads pulls Professional Investors into these stocks.
Our Small Caps Trade Triggers combine fundamental and technical analysis for the best of both worlds.
The Percentage Price Oscillator
Similar to the MACD, the PPO is an indicator founded on the ways each of the 26 and 12-period exponential moving averages or EMA, are behaving in regards to each other. Whenever the PPO is heading higher, momentum is definitely on the upside. Whenever the PPO is heading lower, momentum is certainly to the downside.
Once the PPO passes across the zero line into the positive region it shows the 12-period EMA has crossed over the 26-period EMA, giving a signal for the possibility of a trend change to the upside. Once the PPO passes across the zero line into the negative region it results in the 12-period EMA crossing beneath the 26-period EMA, and the trend may very well be reversing to the negative.
3 Ways Traders Typically Trade The PPO
Traditionally the MACD and PPO have provided three basic trade signals.
1. Get long once the PPO passes above the zero line. Get short, or simply get out of longs, whenever the PPO passes below the zero line.
2. Get long once the PPO passes over its 9-day EMA. Get short (or get out of longs) whenever the PPO crosses below its 9-day EMA
3. Watch for potential trend reversal with divergence (If price is going up and PPO is not)
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