re: message for profit trader walgert,the volumes you talk of...

re: message for profit trader walgert,

the volumes you talk of (500K of stock at 7.5cents) equate to about $37,500 worth of stock. Therefore, the ability for people to push the value of this up or down in big chunks is easily achieved, as it seems that you don't really need to take a big stake in order to push this stock significantly higher or lower.

when liquidity like that is so low, the buying or selling could be due to a number of things, so there really isn't much info to be gained from that. What would be of insight is if there were sellers or buyers in much larger quantities at certain prices (this would generally tell you that someone is trying to take a large stake (if buying), or is trying to off load (if selling).

Market Depth is only ever good to you whilst trade is active. I don't consider market depth to be of much use before the stock opens for trade or after, as orders can be easily put in and pulled out of the screen. When the market is "live" however, the market depth can show you whether there are people that want to buy the stock, or whether people are looking to sell.

If I was only new to this game, I wouldn't be looking to cut my teeth in a stock where liquidity of $40,000 at best can move the stock price by 20% (especially as a day trader) To do so is just asking the market to rip your arms and legs off for you.

Instead, I would be focussing on issues where liquidity is a little more deeper, and where it can allow you to take a decent stake, whilst at the same time giving you the ability to get out without too much damage should things go against you.

When dealing with stocks the size of the one you described, the way I like to play is to just take a longer term position if I like the fundamentals, get myself set, and then enjoy the ride.