Penny Stock Trading

Trading penny stocks is an interesting activity at the best of times. Penny stocks often offer an opportunity for quick and profitable gains but are just as quick to take your hard earned cash from you.

Unlike premier stocks which usually move much slower and have some underlying trading history and measurable fundamentals and reasonable trading volumes, penny stocks can be thinly traded and may have unsubstantiated fundamentals – making the trading a little more stressful.
Now a professional trader can generally extract a little more profit out of a good stock pick than the average penny stock investor and this may seem like a disadvantage – but my experience is that the professional trader is not the guy whose trades you make a profit on. Your target is more likely to be the other average small cap traders.

Your objective then is to learn as much as you can from the professional trader and take that skill into the average trader arena.

Here are some ideas that will help you in deciding when to trade.

A good time to generally trade is about 2:00 to 3:45 PM (Eastern Standard Time).
Unless you have good reason – trading in the morning is not usually a good idea. You need to watch for new information that may affect the price of your stock. Strange as it may sound, stock price fluctuations are the result of rumor and suspicion or greed. So as new data becomes available so the news media publishes and the traders guess what will be the general market reaction. So you need to watch for this as well.

The big institutional traders like the banks and mutual funds watch the market continually throughout the day. They take careful note of the trends in pricing, news updates and any related economic data. Then after lunch – with the close of the working day approaching, they begin to trade.

And it is this general mass activity that begins a stir in the market. Now you will begin to see movement in the stock prices as they are either dumped or gathered. There are many traders who will tell you that the true movement in the stock price is frequently determined more by the trading during the early afternoon than any other time of the day.

That may be true and is why you should pick up your free copy of How To make Big Bucks with Penny Stocks right now.