Low floats and stop outs

[sawtooth500 33]

Does anyone avoid trading low floats for the simple reason that you can't even get a good exit on a market stop? Right now I'm trading super small, only $1000 portions. Today I went long on a low float with a fairly decent setup, and if it didn't go my way then I would have gotten an ok stop out, so the trade setup was decent, but it didn't go my way, and I got stopped out. Except that while I should have lost about 1% with my stop out, I ended up losing 2% because when it went against me it was a violent move, and I just got a horrible fill. And this was with a super low share size, under 100 shares. 

Eventually, I want to scale up my positions, but I'm re-thinking of trading low floats, ever, just for this reason. I mean what if you're in a $100,000 position in a low float, and you get stopped out? The fill on that stop out would just beyond kill you. 

Does anyone here actually successfully trade low floats with high dollar amounts (I'd define that as portions greater than $50,000)?

[Justin 264]

Hmmm I don't know many people in this community that do any of this:

a) Trade low float stocks
b) Consider a $1000 position small.
c) Trade (what you consider) high dollar amounts. Most will think that is very high.

I could be wrong and someone may come in and respond...

Either way, it's all percentage based - you'll get the slippage whether you're at $5000 or $50,000. I do follow quite a few low float traders on Twitter (which publicly verify their trades though their brokers). And that's simply the game with low float - high risk, high reward. Bad fills all around 😛

 

[Brendon 146]

I agree, the community doesn't advise on trading low floats. Low floats whipsaw like crazy, are pumped my chatrooms/promoters (i think this was the 'new thing' in 2012-2015), and crush new traders. They don't behave like mid to higher floats stocks do and usually trade on semi-legitimate catalysts. I admitted before that I thought that was the only way to build up a small account back in 2017. What I learned was that was a sure a way to blow up small accounts. There is NO reason to trade them, or anything under ~20 mil in float. But hey advertising 1000% gains can sure get people excited to look at a website. 

Ya $1000 position in a low float or penny stock is not small, higher float stocks have less ATR so that can be considered less risky generally but never small. 

Been low float/penny stock free since 2018 and loving it.