First, a company must demonstrate high or low volatility in its trading volume and volume movement. If your indicators show that your company trades at less than 1% volatility, your stock is likely to trade in your direction in the long term.
Second, a company must use a “long-term-passive” strategy — that is, it won’t have the tendency to trade on a daily basis as it might in other companies. A long-term-passive strategy requires that you won’t have all the information that would allow you to make good decisions about buying or selling on a daily basis.
Third, a company must meet a high minimum short-term turnover per share. For example, only 4 months can the turnover be 5% — meaning that you should buy at least 10 shares so that these shares remain with the company for a minimum of 5 months. When the turnover is less than 5%, it will be likely that the stock will be selling at a profit.
Last, a company must keep the market actively trading at least 1% of its overall average daily volume of about 40% to meet the 2-for-1 rule. There are two ways to determine this: (1) your own analysis and (2) other indicators (such as price, volume, and price action, and price action, etc.).
How do I know which indicator(s) to use?
There are a number of factors that must affect your investment decision. These include, but are not limited to:
Market depth – the level of liquidity in the stock market and how quickly it moves
Market direction – how much the stock market moves, whether it is bullish or bearish, and the current direction
Liquidity level – if the market moves too rapidly or too slowly, you may lose money in the short term
Liquidity – if the market is thin (meaning there is no liquid money-market funds available) you may lose money when you sell
Liquidity level and price action. It is important to determine the liquidity level by looking at the overall market (as shown in chart 1) or by asking a brokerage representative how the market is trading. You may want to refer to this link for more information.
Chart 1: Stock Index and Current Price
You can see in Chart 1 how the market moves against S&P 500 stock indices for all time. (All time returns are calculated by using the Index Weighted Average Value, but will vary