Penny stock fortunes are available to anyone with the patience to conduct proper research and the persistence to understand different markets. Penny stocks are risky, not cheap. You must minimize risk through practice and due diligence before you can work towards your penny stock fortunes, especially if you hope to start day trading penny stocks.
Finding Your Way To Penny Stock Fortunes
When you first begin your journey towards penny stock fortunes, I suggest you look for stocks within an industry you understand from previous unrelated experience.
Consider your hobbies and interests and even previous responsibilities. Then create a list of companies associated within these areas of your knowledge. Then start collecting data and monitoring their chart performance without any intention of selling or buying penny stocks. Do this before you even start researching the best online penny stock brokers
Watch For Patterns In Penny Stocks
You want to watch for patterns in their chart behavior. You’ll notice companies in the same industry will exhibit some behavior similarities. You’ll want to also practice identifying different patterns among companies in the same industry. Just the act of identifying these similarities and differences will be an excellent exercise for you.
You specifically want to try to predict the lows and highs of any patterns you discover. Eventually you want to spot patterns where it is likely a stock will go from a low to a high.
Do Your Research
Simultaneously, you need follow news and background data for each of these corporations. Try to associate the peaks and valleys of the chart behavior with the data you follow on a company’s operation. When you can separately anticipate stock behavior by both chart patterns and company news than you’re really starting blaze your trail towards penny stock fortunes. Again, you should be doing this all without spending any real money. This is day trading penny stocks practice. You must discipline yourself to conduct appropriate penny stock research before enacting real penny stock trades.
Watch For Penny Stock Fraud & Manipulation
Be wary of hype and fluff news releases. Penny stocks, in particular, are susceptible to market manipulation because of their low value and volatility. Some penny stock investors attempt to manipulate the a penny stock price just enough to profit from quick turnarounds using schemes like the pump and dump. So watch for these fluff press releases and be wary of them influencing your real understanding of the stock’s behavior.
Because you’ve started by watching companies in industries with which you have some degree of familiarity, you should be better able to identify these artificially hyped press releases.
Monitor Daily Volume
The other pattern to identify in prospective penny stock picks is a stock’s daily volume. You want to buy stocks with substantial volume in recent trading. You can’t earn your penny stock fortunes without enough people willing to buy when you want to sell. Good penny stocks should have enough volume so you can sell if and when you need to.
Online Paper Trading
As I’ve said on other pages, I urge you to engage in online paper trading before you dive into online penny stock trading with real money. You need to develop a much greater understanding of the quirks and idiosyncrasies of penny stock market before you incur real financial risk. The real key to online paper trading is to utilize it as a serious professional tool and not a game. Commit the same quantify of money you would if engaged in a real life campaign for a penny stock fortune. Make it as real as possible so you feel the loss when an investment goes bad.
As you can see from these penny stock tips, successful trading penny stocks online requires patience and diligence. The absolute worst behavior to exercise in penny stock investing is impatience. Many variables can lead your investment to go south and without due diligence you greatly increase your risk for disaster. Be patient and methodical and you’ll be far more likely to earn your penny stock fortunes._____________________________________