How to begin day trading penny stocks is the same as when you begin day trading anything. Start small. Never trade with real money until you have traded in simulation and routinely make a profit. And, learn how to use trading indicators. What you need to look for when day trading penny stocks are stocks that trade with acceptable volatility and volume as these are the factors necessary for technical analysis tools to be effective.
Live Day Trading Penny Stocks
Live day trading penny stocks is attractive to many day traders for several reasons. They are, by definition, cheap so you need less trading capital to get started. These stocks can be incredibly volatile with runs of 100% up (or down) in a day. It is important to know which stocks to trade. First of all, day traders need to find stocks that are volatile and trade in high volume. Second, day traders need to watch out for “pump and dump” situations which are too common in the penny stock niche.
Tips for Day Trading Penny Stocks
Penny stocks are unique. They offer potentially greater profits than other stocks. They also have risks that other stocks don’t normally have. When trading penny stocks, beware of success stories. Ignore tips and make sure to read disclaimers. Beware of what company management says. If you make a quick profit, sell the stock because penny stocks are usually penny stocks for good reasons. The same applies to why you should avoid falling in love with a penny stock!
Penny Stock Day Trading Software
There is no specific penny stock trading software. So, like with any “learn in 60 minute” advertisements, be careful. However, there are some trading indicators that will work better than others when trading penny stocks. Any penny stock could potentially become a large cap stock. But, penny stocks do not trade like large caps whose huge volume and liquidity tend to “smooth out” any fluctuations. This can make penny stock day trading more profitable but also more risky.
Start Day Trading Penny Stocks in 60 Minutes
When you see an advertisement saying that you can start trading penny stocks in 60 minutes, beware. You can certainly start trading penny stocks within an hour of setting up. What this will do will hasten your experience of losing money and deciding that you need to go and get a real course such as with DayTradeSafe so that you can learn rules-based trade entries, management, and exits. You will be more successful trading penny stocks when you are a benchmarked professional trader.
Are Penny Stocks Good for Day Trading?
Penny stock trading can be very profitable or it can be devastating to your stash of trading capital. The major problem with trading penny stock is that the vast majority trade in such low liquidity and volume that you can too easily get trapped in a down position with no way out. The other major issue is that penny stocks are too easy to manipulate. The “pump and dump” trick is seen again and again where a penny stock is hyped by people who just bought it and will sell it as soon as the price goes up.
Day Trading Penny Stocks for a Living
If you want to make a living day trading, trading stocks might not be your best route. Day trading taxes on stocks are higher than day trading taxes on commodity futures, for example. And, you can get labeled as a pattern day trader when day trading penny stocks while this does not happen with commodity futures. One of the attractive features of day trading penny stocks is that the trades cost less. Unfortunately, they also generally result in lower profits.
How Much Can You Make Day Trading Penny Stocks?
The first question should be – can you make money trading stocks at all. More than half of all those who try day trading fail to make any money. To make money you need discipline in setting up, managing, and exiting trades which is what you will learn from DayTradeSafe. In regard to penny stock day trading, you need to apply the same discipline as with all stocks, options, futures, or Forex. Then you need a little luck to pick the right stock at the right time. The better route if you are going to confine yourself to stock trading is not to limit yourself to penny stocks. And to learn day trading from a pro before risking any money.
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