Small Cap stocks is stock category of companies which has low market capitalization, Or companies which are growing fast but donot satisfy terms to be categorised in Midcaps or large-caps, majority of Large-cap or Midcap companies were once small caps. Now market capitalization cap for small caps differ in different stock markets and is different in various countries, for instance Company with market capitalization between $ 300 million to $ 2 billion today might be termed as samll cap in USA. whereas in India it might be midcap stock. In general investing in small caps is considered as more riskier then investing in blue-chip(large cap) stocks because the company is in growing mode hence while investing in small caps one should know about the promoters capabilities of the company befor making any investing decision into
small cap stocks.
In this post I would discuss about stock trading tips for SMALLCAP stocks, but some of these tips are same as for midcap stocks or large-cap stocks. However these tips are equally useful for people with interests in day trading. But do follow the gudance of your brain.
Understand Stock Charts: One must thing to do for an investor before investing in a company is to understand and analysis of the stock chart of the company. Investor should analyse atleast 1 year chart before making any investment in shortlisted company. read my
post on Stock Charts for detailed information on this tip.