Usually, this is because it has a heavy float, meaning a large amount of shares that can be traded. A large float is generally not good for retail investors. Float and volume have an inverse relationship: a large float signifies a large supply of stocks. Because the float is larger, you need more demand—or, in stock terms, more volume—to move the price action upward. Additionally, traders who like to short stocks are generally very attracted to large float stocks because they move slower, allowing them to scale more easily into their short positions.
This creates a lot of traps for investors going long. A “grinder” can also be a lower float stock. In this situation, it usually means there are many people on both the bid and ask sides of the trade. As a result, there is a massive tug-of-war going on, which results in lateral price movement that is very choppy and causes a lot of flush movements or price surges. The price flushes hurt the longs, and the price surges hurt the shorts. For this reason, we generally stay away from “grinders” unless there is very strong news that creates massive volume, which would justify trading that type of stock.
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