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Getting to Know Fried Stocks: Understand the Characteristics and Risks

monarchcb.com - Fried stocks are often the talk of the town. Many stock investors made big profits from fried stocks, but many were seriously injured because of it. Actually what is fried stock? What is the identity of fried stock? What are the risks of buying fried stocks?

What Are Fried Stocks?

Fried stock is a title for stocks whose stock movements are believed to be the result of engineering. Fried stock price movements can be very volatile. The cost can go up very big, but it can also go down very steeply without any reason. The movement of fried stock prices is due to the behavior of the "boss" who manipulated or fried the stock. The boss here can refer to a person or institution that has solid capital.

Fried stocks are also often referred to as small money stocks, because they are generally cost-effective. Outside the country they are called penny stocks. This term refers to stocks whose cost is at the base of $1. The penny is a 1-cent coin in the United States Syndicate. The number 1 penny or 1 cent is 1 or 100 dollars.

Where did the idea of ​​the term fried stock come from?

Fried speech is generally used to describe a delicious meal, crispy, fried in oil. It's good to eat when it's hot. But in a moment it has cooled, so it is soft and not delicious. Fried stock is also close to that. The longer it is fried, the stock can be very interesting, then rises, but can quickly spin down. Eating fried foods can make high cholesterol. Buying fried stock also has its own cholesterol, is a big risk. The term fried stock actually arose from the conversation of investors and traders, which was then used extensively to this day.

What is Friedan Stock Identity?

  • The nominal price is economical, generally on the basis of Rp. 1000 per share. Usually third liner or second liner stock. Keep the cost small, keep the stock easy to fry
  • The market investment is small. Market investment is the total number of shares in the market, calculated from the share price times the number of shares spread. Continue to be a small market investment, continue to be easy to fry the stock
  • Illiquid. Usually fried stocks are illiquid (not frequently traded). It only flares up when it's fried.
  • Elementary issuers are generally not good or not real.

Advantages of Buying Fried Stocks

  • Profitability is enormous. Get profits up to tens to hundreds of percent in a short duration
  • There's always an opportunity. Blue chip stocks are generally only profitable when the stock market is bullish. But fried stocks can provide an opportunity for good profits when stocks are bullish or bearish. There are always fried stocks that go up. We live smart looking for it.
  • No need big capital. The majority of fried stocks are cost-effective, so it's quite a small budget to be able to trade fried stocks.
  • No need to wait long. The movement of fried stocks is very fast. So it doesn't take long, profits can be received in a matter of hours, minutes let alone sometimes seconds.

Disadvantages of Buying Fried Stocks

  • The ability to risk is enormous. It fits the principle of High Risk, High Return. If you're not careful, you can seriously injure yourself.
  • It takes great skill. It is not random that traders can successfully trade fried stocks. Must have a trading system, solid money management, and normal trading psychology. If you don't have all of them, it's hard to succeed.

How big is the risk of buying fried stock?

As previously stated, fried stocks carry a very large risk. The following are some of the risks that can arise when buying fried stock:

  • Injuries up to tens of percent. This is due to very large price volatility. Fried stocks are easy to go up, also easy to go down in an instant.
  • ARB in volumes. Fried stocks can immediately plummet to the ARB (Basic Auto Rejection) price. You can buy the shares, but you can't sell them at all. ARB can sometimes be interwoven many times
  • The price can drop to the basic limit of Rp. 50, another name for a gocap stock company
  • Stock suspended. You can buy the shares, but you can't sell the shares. Interruptions related to the problem, can be momentary to long up to years. It means that there is an opportunity cost because money stagnates
  • Stocks are sleeping stocks. Can not move for years.
  • The industry is in trouble, collapsed, then delisted. Stock so there is no such cost at all.

Do Fried Stocks Need to be Stayed Out?

The response relates to your current position:

  • If you are a newcomer stock investor, then fried stocks are listed as one of 4 risky things that must be avoided.
  • If you are a long-term stock investor, then just skip fried stocks. Usually elementary companies do not want to comply with the provisions. Really don't need rotten stocks to enter the investment portfolio
  • If you are a trader who wants to trade fresh and free, should stay away from fried stocks. Can make a heart.
  • If you are a fairly professional trader and want to try trading fried stocks, please try. There is also a koq, a successful trader who specializes in trading fried stocks, although the numbers are not that many. But it should be noted, that trading fried stocks is not easy and requires great trading skills. Always be careful when trading fried stocks.

Hopefully this post is useful