How to earn big buck on penny stocks


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Penny stocks belong to microcap stocks that are extremely risky for a trader. Blue chips are considered safe. However, almost 401k of retirement plans as you remember just disappeared when blue chips lost their value in the United States.
Penny stock trading is a proper sphere for really adventurous minds. It is easy to win and easy to lose at it. With solid strategy, even penny stocks are safe. Just stick to it to increase your profits and decrease losses.
Make research before investing. The sources include newsletter, website of the company. You can check the section with SEC filings and press releases. Analyze the charts with special tools. The main indicators are price per share, bid and ask spread, average volume. After analysis, the proper strategies can be developed with regard of entry and exit price.
Look at the chart to see the price per share within certain period and the current price. The level of trading can be either closer to support or resistance level. The volume of trading is also important because its type can affect your decision. When volume is low, that means that not many buyers want to acquire it. It may happen in case spread between bid and ask is big.
Really successful traders do not act the way others do. They need to buy when others sell and sell when others buy. It sounds confusing but this is the way to earn big buck and get profit in every trade.
The trader should find the companies that suffer losses. This is a natural thing for every company. You should remain cool when other traders begin to panic. Smart traders see that this is just a temporary drop and buy stock low. Then they keep these shares until better times arrive. The main thing is to determine the best point to sell. At this period all others will buy the stock and you can get your profit.
Experienced penny stock traders are very choosy and prefer not to invest to any company. They select the proper stock after making some research of the company. Some traders ignore this step and then call trading risky. Though this is so, much depends upon the style of a trader and the way he performs his work. But how is it possible to buy without research? What do they rely on? Many automated programs appeared, for instance, Penny Pump Finder. It fulfills much work for you but this is not the reason to rely on it only. Many traders do everything according to the program. If you are equipped with automated tools it is easier to see the trends and analyze the cases.

good luck
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