Trading Stocks – How to Buy More Secure Stocks?
So you bought a stock and it crashed 30% overnight. What are you doing now? Good question, indeed. This is also a difficult, so there is no correct general answer. Your trading plan, you should have been prepared, even before you start trading, should answer this.
But let us ask a more easy question, and a question related to the problem at hand. That is, it is possible to know how risky individual stocks are so that we can avoid future situations. Of course, not many people like this kind of disaster.
In other words, we want to know whether there are some risk measures in the stock market. Yes, there is one such measure called beta or beta.
This measure measures the volatility of the stock. It measures it relative to the broader market and it has a beta. A beta of a stock is a volatility like the general market. Stocks with less than 1 share have lower volatility, and stocks with beta shares above 1 have more volatility than the general market. Beta is not subject to the above constraints, in principle, so there are stocks, betas up to 3 or 4 or even higher. Many similar stocks are penny shares, which is one reason why stock stocks should be avoided.