How To Determine Which Penny Stocks To Watch…

How To Determine Which Penny Stocks To Watch…

A major part of learning to trade is finding which penny stocks to watch. At any given time there are only a handful of stocks in play. When the overall market is strong, more companies pay for stock awareness campaigns, and the number of high volume penny stocks will be higher. When the market is dropping less companies will be willing to pay for stock awareness, and there will be many less tradable opportunities. When trading in penny stock market, if penny stocks do not have a current stock promotion you will have a very hard time profiting from a stock. This is why you should be very selective about what penny stocks you watch. Many penny stocks do not deserve your attention because their volume is so low that they barely even move or they move a ton on almost no volume. It will be nearly impossible to get in and out of these types of penny stocks, so you shouldn’t even attempt to trade them unless you are interested in losing.

Some Penny Stocks To Watch in 2013

It’s difficult to give a list of penny stocks to watch because the list changes daily. I could write a list of current penny stocks to watch that are in play but if you were to read this article one month from today, February 03, 2013, you would be looking at outdated information. None the less in 2013 some of the hot penny stocks so far have been SWVI, ZPPB, ECAU, CCUR and MJNA. There certainly have been other stocks which made large moves but not many of them had the massive volume like the best penny stocks I have just listed. I am only interested in these types of penny stocks because my strategy allows me to profit from them nearly every time.

Tradable Penny Stock Cycles

Penny stocks go through defined trading cycles. In general most penny stocks get promoted every 3-6 months. When you look at the long term daily or weekly chart of a penny stock you will normally notice that most penny stocks have large spikes which typically occur over several days or in extreme cases several weeks at the very most. These spikes are due to these stock promotions and you will notice the stocks ALWAYS drop back down to where they started before the spike, and usually go much lower. This is the main reason why investing in a penny stock in the long term is a horrible way to attempt to make money, because the truth is 99.99999999% of penny stocks are horrible companies. You must be selective in choosing the penny stocks to watch or watch out

Watch Top Penny Stocks That Move
Penny stocks go through defined trading cycles. In general most penny stocks get promoted every 3-6 months. When you look at the long term daily or weekly chart of a penny stock you will normally notice that most penny stocks have large spikes which typically occur over several days or in extreme cases several weeks at the very most. These spikes are due to these stock promotions and you will notice the stocks ALWAYS drop back down to where they started before the spike, and usually go much lower. This is the main reason why investing in a penny stock in the long term is a horrible way to attempt to make money, because the truth is 99.99999999% of penny stocks are horrible companies. You must be selective in choosing the penny stocks to watch or watch out

Penny Stocks To Watch on the move

Stock screening tools are a great method to find penny stocks to watch. There are many of these tools available, but some work a lot better than others. Some are only online and others are programs that can be downloaded to your computer. The online stock screening tools are usually less customizable than software based screeners because they have a lot less filters for you to choose from. The software programs will let you customize almost anything you want and search for only stocks which meet the exact criteria that you select. If you want to actively trade penny stocks and know whatever penny stocks to watch at any given time, then you certainly should consider utilizing a stock screener like Equity Feed.

Becoming Knowledgable About Trading Penny Stocks

Becoming Knowledgable About Trading Penny Stocks

Hot penny stocks are not difficult to locate but it is difficult for the average person to pick hot penny stocks that will make larges moves in their favor. You need to discover a method of stock scanning or filtering out stocks which have the potential to double or triple in a short period of time. Although some stocks increase rapidly, its usually not possible to profit off most of these. The main reason for this is that the liquidity in the penny stock market is not enough to allow traders to take a large enough position. If a stock priced at $.20 per share increases to $.40 its very unlikely that you will be able earn the entire $.20 of upside. Best case scenario, you most likely will only be able to gain $.08 – $.10 of this move.

Long Term Trading Penny stocks Investment Is A Bad Idea

In order to be success in trading penny stocks, you need to focus on short term trading. Buy and hold does not work in penny stocks because penny stocks are low quality companies. When you invest in a penny stock for more than a couple days you are essentially gambling since penny stocks are terribly run companies. Why place hard earned money into lotto tickets, when theres much better ways to invest your money for the long term. Many penny stocks seem like great companies, but unfortunately they are not at all. Hot penny stocks manage to attract lots of market participants because of their inovative idea’s for a product or service, yet their great idea’s are really all they have.

Don’t Believe In The Hype! (Penny stock trading tips)

A lot of penny stock trading companies may claim to be the next Apple, or Google, but they are completely lying about their potential. The management of these companies are usually no better than a used car salesmen, and a lot of times penny stocks only have 1-2 employees although they try to make investors believe they are a legitimate business with extensive operations. Most of these hot penny stocks are typically in an investigative state which means they don’t produce any products or offer any services. For the most part they are more or less trying to get money from their investors in order to grow their business. These would be no problem with this if they had a plan in place to eventually help increase the wealth of their shareholders, but very few have any intention of doing this. Instead they issue additional shares of equity in order to raise funds and prevent going out of business. When their cash on hand gets depleted they rinse and repeat.

An Introduction to Penny Stocks

An Introduction to Penny Stocks

A “penny stock” isn’t a literal term, but compared to the prices of higher stocks, it may seem like a bargain. Common stocks that cost less than $5 are usually called penny stocks, and while they have a lower individual price, investing in top penny stocks can be just as risky as any of the higher priced variety, if not more so in some cases. There are some misconceptions about penny stocks that should be cleared up:
Penny stocks are not a “get rich quick” stock.
Penny stocks are not a guaranteed profit.
Not every penny stock is a bargain.
With that in mind, let’s look at how to invest in penny stocks for the absolute beginner.

Getting Started in Penny Stocks Trading

The first step is to do your research. There are a lot of stories about penny stocks helping investors to get rich overnight, but you need to figure out what makes the most sense to you. There are brokers that actually specialize in handling penny stocks. These brokers may be able to point you toward penny stocks to watch, but do your own research before you make an investment through the brokerage.
Also, think about investing in a penny stock that is listed on the NASDAQ. If you have absolutely no experience in investing in the stock exchange, then these are the stocks that are going to have the most “security,” although it is still not a sure thing. Stocks that have been de-listed are usually indicative of a company that is going through some financial turmoil, and what you want is something that is a little more stable, whether you’re investing in penny stocks or larger offerings.

Keep Researching

After you’ve made your investment, stay on the lookout for other Most Active Penny Stocks and how they’re performing on the market. Because penny stocks should account for 1/10th of your investment portfolio or less, these aren’t going to be your prime performers. Instead, they’re a way to diversify your investment strategy and get in on some unique and affordable investment opportunities. The more research that you do on the subject, the easier it’ll be to find the best penny stock for your investment strategy.
Awesome Penny Stock Trading aren’t usually obvious to the new investor. Your broker can most likely point you toward some options that are worth considering if you want to get the best bang for your buck.