What does volume and huge daily price increases say about stock prices?
Stock B could be considered to be more risky because it seems to be more volatile - sharp rises on large volume increases can easily be followed by sharp drops or by further rises in the start of a new uptrend.  However, if both A and B are trading on low volume in general, they can both be more on the risky side due to having relatively low liquidity, especially if you buy a large order compared to the average daily volume. But just looking at the criteria you have included in your question is not enough to determine which stock is riskier than the other, and you should look at this criteria in combination with other indicators and information about each stock to obtain a more complete picture.
Firstly what are you trading that you could lose more than you put in? If you are simply trading stocks you will not lose more than you put in, unless you are trading on margin. A limit order is basically that, a limit on the maximum price you want your buy order bought at or the minimum price you want your sell order sold at. If you can't be glued to the screen all day when you place a limit order, and the market moves the opposite way, you may miss out on your order being executed. Even if you can be in front of the screen all day, you then have to decide if you want to chase the market of miss out on your purchase or sale. For example, if a stock is trading at $10.10 and you put a limit buy order to buy 1000 shares at or below $10.00 and the price keeps moving up to $10.20, then $10.30 and then $10.50, until it closes the day at $11.00. You then have the choice during the day to miss out on buying the shares or to increase your limit order in order to buy at a higher price. Sometime if the stock is not very liquid, i.e. it does not trade very often and has low volume, the price may hit $10.00 and you may only have part of your order executed, say 500 out of your 1000 shares were bought. This may mean that you may have to increase the price of your remaining order or be happy with only buying 500 shares instead of 1000. The same can happen when you are selling (but in reverse obviously). With market order, however, you are placing a buy order to buy at the next bid price in the depth or a sell order to sell at the next offer price in the depth. See the market depth table below:  Note that this price depth table is taken before market open so it seems that the stock is somewhat illiquid with a large gap between the first and second prices in the buyers (bid) prices. When the market opened this gap is closed, as WBC is a major Australian bank and is quite liquid. (the table is for demonstration purposes only). If we pretend that the market was currently open and saw the current market depth for WBC as above, you could decide to place a limit sell order to sell 1000 shares at say $29.91. You would sell 100 shares straight away but your remaining 900 sell order will remain at the top of the Sellers list. If other Buyers come in at $29.91 you may get your whole sale completed, however, if no other Buyers place orders above $29.80 and other Sellers come into the market with sell orders below $29.91, your remaining order may never be executed. If instead you placed a market sell order you would immediately sell 100 shares at $29.91 and the remaining 900 shares at $29.80. (so you would be $99 or just over 0.3% worse off than if you were able to sell the full 1000 shares at $29.91). The question is how low would you have had to lower your limit order price if the price for WBC kept on falling and you had to sell that day? There are risks with whichever type of order you use. You need to determine what the purpose of your order is. Is it to get in or out of the market as soon as possible with the possibility of giving a little bit back to the market? Or is it to get the price you want no matter how long it takes you? That is you are willing to miss out on buying the shares (can miss out on a good buy if the price keeps rising for weeks or months or even years) or you are willing to miss out on selling them right now and can wait for the price to come back up to the price you were willing to sell at (where you may miss out on selling the shares at a good price and they keep on falling and you give back all your profits and more). Just before the onset of the GFC I sold some shares (which I had bought a few years earlier at $3.40) through a market order for $5.96. It had traded just above $6 a few days earlier, but if instead of a market order I had placed a limit order to sell at $6.00 or more I would have missed out on the sale. The price never went back up  to $6 or above, and the following week it started dropping very quickly. It is now trading at about $1.30 and has never gone back above $2.00 (5.5 years later). So to me placing a limit order in this case was very risky. "Buying pressure is when there are more buy orders than sell orders outstanding.  Just because someone wants to buy a stock doesn't mean there's a seller ready to fill that order.  When there's buying pressure, stock prices rise.  When there's selling pressure, stock prices fall. There can be high volume where buying and selling are roughly equal, in which case share prices wouldn't move much. The market makers who actually fill buy and sell orders for stock will raise share prices in the face of buying pressure and lower them in the face of selling pressure.  That's because they get to keep the margin between what they bought shares from a seller for and what they can sell them to a new buyer for.  Here's an explanation from InvestorPlace.com about ""buying pressure"": Buying pressure can basically be defined as increasingly higher demand for a particular stock's shares. This demand for shares exceeds the supply and causes the price to rise. ... The strength or weakness of a stock determines how much buying or selling interest will be required to break support and resistance areas. I hope this helps!" "You said your strategy was to put it into a index fund.  But then you asked about setting  stock limits.   I'm confused. Funds usually trade at their price at the end of the day, so you shouldn't try to time this at all. Just place your order. If you are buying ETFs, there is going to be so much volume on the market that your small trade is going to have no impact on the price. You should just place a market order. A market order is an order to buy or   sell a stock at the current market   price. A limit order is an order to buy or   sell a security at a specific price. In the US, when you place a trade with any broker, you can either place a limit order or a market order.  A market order just fills your order with the next best sellers in line.  If you place an order for 100 shares, the sellers willing to sell 100 shares at the lowest price will be matched with your order (sometimes you may get 50 shares at one price and 50 shares at a slightly different price).    If your stock has a lot of volatility and you place a market order for a small amount of shares,  you will get the best price. If you place a limit order, you specify the price at which you want to buy shares.  Your order will then only be filled with sellers willing to sell at that price or lower (i.e. they must be at least as good as you specified).  This means you could place an order at a limit that does not get filled (the stock could move in a direction away from your limit price).  If you really want to own the stock, you shouldn't use a limit order.  You shouldn't only use a limit order if you want to tell your broker ""I will only buy this stock at this price or better.""  p.s. Every day that passes is NOT a waste.  It's just a day that you've decided investing in cash is safer than investing in the market." The recent move of Indian Government with the daily revision of fuel price comes out as a better proposition for automobile users. Earlier, when petrol prices were revised every fortnight, a huge additional pressure was created due to a big variation in fuel prices. Therefore, the foremost benefit of a recent daily change in diesel price allows Indian fuel consumers to easily absorb any alteration in daily petrol prices by a few paise. "Trading at the start of a session is by far higher than at any other time of the day. This is mostly due to markets incorporating news into the prices of stocks. In other words, there are a lot of factors that can affect a stock, 24 hours a day, but the market trades for only 6.5 hours a day. So, a lot of news accumulates during the time when people cannot trade on that news. Then when markets finally open, people are able to finally trade on that news, and there is a lot of ""price discovery"" going on between market participants. In the last minutes of trading, volumes increase as well. This can often be attributed to certain kinds of traders closing out their position before the end of the day. For example, if you don't want to take the risk a large price movement at the start of the next day affecting you, you would need to completely close your position." "I looked at data from Sept 2010 to present: Standard deviation is what shows the spread shape of returns over time, and it meanS that about 2/3 of the time, AAPL return was within +/- 1.65 higher/lower than the daily average return which was .21 %. Not sure where to go with this except to suggest that in fact, AAPL is more volatile than the S&P and even another random tech company. With time, I'd probably come up with a list of stock more volatile. I know that when I look at a list of stocks I track on Yahoo, there are always a few that are just as volatile on a given day.  Excel makes the above analysis easy to do for a given stock, and it's actually an interesting exercise, at least for me. Disclaimer - the shape of stock returns is not a bell curve, and STdev is just a best fit.  Edit - given more time to tinker on excel, it would be interesting to see how the stock's volatility tracked over the years, did it increase or does it feel that way due to the high price? A $20 swing on a $600 stock is the same as a $2 swing on a $60 stock, yet ""up $20"" sounds huge." How I understand it is: supply/demand affect price of stock   negatively/positively, respectively. Correct. Volume is the amount of buying/selling activity in these stocks (more   volume = more fluctuation, right?). Sort of.  Higher volume means higher liquidity.  That is, a stock that is traded more is easier to trade.  It doesn't necessarily mean more fluctuation and in the real world, it often means that these are well-understood stocks with a high amount of analyst coverage.  This tends towards these stocks not being as volatile as smaller stocks with less liquidity. Company revenue (and profit) will help an investor predict company   growth. That is one factor in a stock price.  There are certain stocks that you would buy without them making a profit because their future revenue looks potentially explosive.  However, these stocks are very risky and are bubble-prone. If you're starting out in the share market, it's generally a good idea to invest in index funds (I am not a broker, my advice should not be taken as financial advice).  These funds aggregate risk by holding a lot of different companies.  Also, statistics have shown that over time, buying and holding index funds long term tends to dramatically outperform other investment strategies, particularly for people with low amounts of capital. SeekingAlpha has an article about short squeezes that states: The higher the number of days to cover means the possibility for a short squeeze is greater, and the potential size of the short squeeze is also greater Logically, this makes sense. A short squeeze occurs when a lack of supply meets excess demand for a stock, so the potential for a squeeze increases when supply and demand begin to get out of equilibrium. Think of two things that would cause the days to cover to increase and what effect they would have on supply and demand.  The current short interest (numerator) increases. This implies that if some event triggers short sellers to cover their position, there are a higher number of short sellers who will need to do so. This heightens the chances that demand will exceed supply.  The average daily volume (denominator) decreases. This implies that fewer investors are trading the stock, so if an event triggers short sellers to cover their positions, there might not be enough traders in the market willing to sell their shares. (Obviously, if a short-squeeze occurs, volume may increase because traders who were unwilling to sell their shares become willing).