Limit orders essentially mean an investor can preset the prices at which they are willing to buy or sell the stock. When using limits, you need to know the space you’re trading in, Guy says. Biotech companies are far more volatile and therefore require limit orders much in a much wider than where stock is trading. Some of the big-cap industrial stocks don’t move as much and limits can be left much closer, he says. The bottom line is to know the space you’re in and know how volatile the stocks are. When you know that, you can set limits accordingly.
Question #3: Sam from Ohio asks how to separate what she likes in retail from what companies are best for investing.
Jeff says it’s common for people to confuse a pleasurable shopping experience with a disasterous business. One way to tell: if you like shopping at a store because everything seems to always be on sale, that’s a sign the underlying business is weak, he says. Instead, look for stores that sell their goods at full prices. Think as a consumer and businessperson when you shop, he says.
Question #4: Addy from Connecticut is a novice investor. She is trying to get into the game using charts. She wants to know what key technical indicators she should look for before making trade?
Eric advises that she start with the “point and figure” method of charting. It literally means drawing an X and O at every single price point on the chart. It eliminates time as a factor and just shows price action. It will give you a feel for how markets trade, what makes companies move, and then you can go from there, he says.
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On APR 6, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Bolling Owns (DIS), Gold, Silver
Strazzini Owns (VZ), (YHOO)