Penny Stocks to Buy: How to find good Penny Stocks to buy?
Be careful listening to experts when they suggest to you penny stocks to buy.
If you have signed up with any mailing lists about penny stocks to buy you should be very careful listening to these advertisements from penny stock promoters.
First this is how they are making their money. They make their money from relaying what they are being paid to tell people.
Today I received a stock alert on ENCO about its volume exploding. Keep in mind that high volume poses potentially good trading opportunities, but this message was sent two hours after the initial stock volume burst. Two hours later is not going to do you, me, or anybody else any good. If you miss the move within the first couple minutes, it's already done. Put a fork in it.
Sometimes stock alerts can provide good opportunities, but if you miss the first big move a lot of the time you've already missed good entry.
I prefer to trade on price action, not news or technical indicators. If price wants to go somewhere, why should I argue with it? I will ride the price and when I see hesitation, I jump off and sell and say thanks for the ride.
But you can use technical indicators. You can use technical indicators such as: Moving averages, MACD, RSI, CCI, there is a whole lot of different technical indicators. Some make sense, some do not, others I cannot begin to understand.
I do not see this said often enough, technical indicators are relying on past information. Sure, it may just be five minutes before or a single tick or whatever time frame you have your chart set to, but it cannot be disputed that technical indicators are based on past performance and cannot accurately indicate any future trend.
With that said, a lot of people do use technical indicators and stocks tend to follow a general guideline of what an indicator says it will do. The more popular an indicator among traders, the more frequently a stock will go according to a popular indicator. This is because of the people using the indicators, and as a result stocks tend to go where people are applying buying or selling pressure on a stock.
How to find penny stocks to buy? Try a stock screener. There are ones for free. I suggest using the stock screener supplied by your brokerage, because you will probably have the extra options such as saving a list of the stocks you have an interest in, and things such as that.
Learning how to screen for good penny stocks to buy can be the difference between trading success or failure. A good stock screener for example is Equity Feed. I know people who refuse to use anything else when trading penny stocks.
Often their favorite stock screen setting is to look for stocks that have an immediate burst of volume, set to their predefined criteria. Set the screen alert for volume across the entire stock market too high and it might not be triggered, set the volume screen alert for too low and it may give you too many erroneous alerts.
With some trial and error (I hope not too many lost profits) you too can begin to wonder how you ever managed to find penny stocks to buy.
Disclaimer: Trading stocks is risky. You can lose all your money if you are not careful. I am not advising you to purchase any stocks. All the content on this web page is only my opinion and is not to be regarded as any advise.