subject: Stock Picks For Penny Stocks [print this page] Lots of people who do day trading always look for advice on how to trade penny stocks. Be it experienced, or wet behind the ears, There are methods to buying and selling penny stocks with out losing your shirt. It's not too hard to realize when to buy and when you sell once you understand a few basic guidelines
On the average, a reversal on price during a period of heavy volume is good when the spike of volume is always followed by a trend which is on the downfall on the days and even even weeks to come. Keep your eyes peeled for large spikes when the stock opens. Normally, this is a sign of a stock price reversal. This is a large sign that a breakout is in the future
Keep in mind volume spikes. Be sure to pay attention and always keep a lookout for pullback. Investors begin to get frustrated when they lose out on fast moving stocks. What is seen there is the pull back on the stock after it comes out. Fast gains are often obtained after the opening run get to a high. What the theory here is, is that you should be on the lookout for the bottom of the first pullback.
Deifinately do not sell as a stock reaches the second day, it as it starts to build momentum. More important than that, choose a time to buy,and to sell. You need to figure on selling now and obtaining a quick profit on a penny stock that does well the first day, or waiting out to see if you can get the rewards of one more day. This depends on the flow of the penny stock through to the next day. You will end up searching for another spike in volume If you are persistant to hold onto that penny stock in the second day. Then look for the penny stock to level off or decide to sell it off.
All of these tricks are centered around the idea that the stock market is made up of highs and lows. In working with penny stocks, momentum is most important and is largely based around big changes in volume. By doing your homework, you will learn to understand a trend in pricing. Identifying breakouts and breakdowns, you will have a general understanding of when to get into and out of a stock.
