Hey everyone today we're going to be talking about Blue Chip stocks versus small cap stocks. Now we love them both in stocks of trading and day trading land. But it's important to understand the different differences as well as have different expectations for trading these stocks. So keep in mind this actually three-part series.

We're gonna get really in depth here on the difference between those higher priced, higher quality stocks that you can trade with a small account. It drives me nuts when people don't recognize that you can actually trade the Teslas, the apples, the Amazons, the Nvidias, the Facebooks. Now you got to have the right approach and you got to know when they're in play as we say. But when they're in play, these small are these.

Uh, Blue Chip Stocks are some great great trading opportunities and then vice versa If you're much more risk-averse I Always say you can kind of squirrel these away. You know, one of my favorite swing trade opportunities from 2022 was Exxon Mobil and Occidental Petroleum. They both, uh, perked up, broke out back in the beginning of the Ukraine situation and basically all they did was go higher the entire year. Now they didn't move like small cap stocks, but just a nice orderly grind.

You can trade them in your IRA your long-term account and you don't have to micromanage them. So what are the difference between a blue chip stock and a small cab? We'll start out with a blue chip stock and what those attributes are. So right off the bat, they're the best of the best when it comes to profitability and products. Okay, they're well known.

They're well recognized. Okay, these are the Microsofts. These are the you know even. IBM I know IBM isn't really in the news anymore.

but think of IBM you know 100 plus year old company International Business Machines Exxon Mobil Another great example. Okay, Exxon Mobil ain't going out of business anytime soon Apple Okay, uh, you know again, the big, biggest, best known safest companies out there. Okay, they're very high. No highly well known and reputable.

You don't have to worry about them doing sketchy stuff. Okay, the other thing is, they have a huge market cap. Okay, billions of market cap. Hey, maybe if it's Apple or Amazon trillions.

Okay, after the pull, you know we've had the the tech pull back here. Apple was over 2 trillion. Uh, I think Amazon Either broke 2 trillion or flirted with it a few times before the pullback. I mean the biggest companies in the world.

Now again, understand that's great for your long-term Holdings It's great for your safety, but when you're talking about those massive market caps, they don't move. Okay, if you see a a one percent or a two percent move on. Apple Everyone loses your mind their minds. Now you can trade those with options.

Okay, keep in mind I know I Don't talk about options a ton on this channel. but if you check out stocks to trade live So stock Straight live The link will be below. We do four live webinars a day and I bring that up because number one, they're 100 free morning, midday evenings, and on the weekend. and my buddy uh Rob Booker and Bryce Tui both really specialize a lot in options and they talk about that a lot.

So if you're looking to trade some of these bigger, uh, market cap stocks with a small account, options are really the way to go. Because if you trade them with a small account and you buy the equities directly, you gotta wait weeks or months for an appreciate move. So check out Stock Straight Live. hit up my buddy Rob and ask him about his option strategy to trade these stocks.

So um, they have a you know Blue Chip stocks long history. Okay, you don't get into that club without being around for decades. I mean even you know you think of probably like a Facebook but I mean at this point Facebook's been around 15 years. Okay, long history They and and that's why you can depend on them to not do Shady stuff because they have a legacy.

They have a a history that they're trying to protect. They're going to protect the business. They're going to make good decisions that'll create slower moves, but it creates stability. Um, they're part of a big index like the S P or the Dow.

Remember the S P 500 is 500 stocks. If you're in the Dow Jones it's only 30 stocks. so really the best of the best are in the Dow Jones uh Djia the the 30 biggest market cap stocks out there. But the S P 500 is 500 stocks and still very high quality.

D And that's what you look for. You want them to be included because I mean the Dow is Dow Jones and the S P. Uh, you know they're doing research on these companies they met. They audit their financials, They look at their sales, they look at their growth, and they only allow them to stay in the index if they're continuing to grow.

If they're continuing to make good business decisions, Um, a lot of them pay dividends. That's the other nice thing, especially if you're looking to hold these stocks for multi-month multi-year It is always nice when you're trading a huge market cap stock that maybe is only up one or two percent. Always nice to get that dividend check to kind of pad the wallet. as they say.

Now let's flip over to small cap stocks. and what's the different? Um, you know when I think of small cap stocks, there's a lot of different metrics. A lot of people think hundreds of millions or even in the low billions. What I think of and what I think to trade is I Kind of like to avoid that mid-tier You know when you're talking 200 million, 500 million a billion marketed cap? Sure, that may seem like a small cap compared to a two trillion dollar company, but it really isn't.

It's like to me that's kind of the No Man's Land because you trade the big cap stocks, the huge companies that before their safety. That's why you're involved in those. Then you get into that no man's land where they're risky. but the risk to reward isn't great.

The reason I Love the low float true penny stocks. You know we're talking two million market cap, 20 million market cap. Maybe once in a while, a 100 million dollar market cap. What's great about them is sure they're risky, but they have such high reward.

You know these are the stocks that go 50 100, 000 in a day. So avoid that mid-tier I I would say everything 250 and Below 250 million below everything Above That Into the Blue large caps and then the Blue Chips just ignore those. Um, and what's great about those penny stocks as well as the real stats is we can trade them both. We trade similar patterns.

We just have different expectations and different risks to reward profiles. You know, something like a blue chip stock. You can, actually, you know I never recommend breaking your stop. But I mean if if your stop gets hit on a blue chip stack by a couple cents, you let it ride.

Okay, when we're trading penny stocks, we stick to the stop. Okay, there's no looking back. There's no oh hey, maybe it will bounce. No, we we trade penny stocks ruthlessly.

Okay, everyone gonna come back with part two where we're gonna talk about the pros and cons of blue tips versus small caps. And like I said check out Stocks to Trade Live. We talk about day trading, swing trading and options, Multiple presenters. so hey, maybe you don't.

Hopefully you like my style. but if you don't like my style Rob Booker does webinars? Matt Monaco does webinars? Bryce Tui It does webinars. We're adding new Traders all the time. You can kind of jump on that webinar and in that time of day, that works for you.

So click that link to stocks to Trade Live. We'd love to see on a webinar.