How To Day Trade Penny Stocks For Beginners

Lili Pelagius October 6, 2022 Forex

How To Day Trade Penny Stocks For Beginners – Alton Hill is the co-founder of He has a passion to help people and he found that one of the ways he does it is through the world of day trading. Alton’s expertise is in product design and design thinking which he uses to write and improve the overall experience.

Topic Story Ideas Step 1 – Focus on Hot Stocks Step 1 – Filter Using Volume Step 3 – Avoid High and Low Stocks Step 4 – Find Stocks with Tight Spreads Step 5 – Trade the GLUU Setup AEZS UGAZ In Summary History Highlights Daily trading stocks require an approach to finding and trading the best opportunities in the market Penny stocks are different from other securities because the movement Prices can vary greatly. levels on the chart If you’re looking for action in the market, you’re sure to find penny stocks trading. There are a few paid services out there that claim to have the secret sauce to trading penny stocks. Although some of these services may have advantages, I believe that with a good balance of money management and tolerance for risks, you can find the key to unlocking profits. without spending thousands of dollars. In this article, we will provide a step-by-step process for trading penny stocks that will take the difficulty out of trading these tools. Step 1 – Focus on the Hot Stocks First So, how do penny stocks work, and how do you find them? If you’re looking for penny stocks, you can search for items under $5 dollars. It will probably return a long list like the one below. List of Penny Stocks This list is a few of the penny stocks listed on the NASDAQ. Once you add in the NYSE and AMEX, the number of penny stocks will easily run into the hundreds. You can also see from the list of penny stocks that some of them have low volume. Low Money Penny Stocks Yes. You read the volume statistics carefully, there are rarely less than 10,000 trades in a whole day. The process of narrowing down the list of available penny stocks from the hundreds to the top penny stocks is very simple. You need a few tools to scan the market for high-quality penny stocks that are trending on the day. To see a real-life example, let’s take a look at the market action on March 17, 2015. Using the market mover screener within the app, we can quickly see which stocks have moved up and down significantly on the right amount. During the main index, there were 4 penny stocks on the decline. Biggest Percentage Gainers Meanwhile, there were four stocks on the list of biggest gainers. Biggest Percentage Profits For you guys out there, I understand that GLUU is over $5, but since this picture was taken at 9:34:13, it can easily be downloaded. GLUU is under $5. Step 2 – Filter by size We went from a list of a few hundred, to eight and now we need to further narrow down the list of stocks. The next quick way to filter our list is to remove the low penny stocks. From my article on how to sell the most active list, I said that I need a part to sell at an average of more than 40,000 per 5 minute bar. Let’s take a look at the list of the biggest losers in the face of this demand. MCP-Volume PLUG-Volume CYTX-Volume AMRN-Volume As you can see, each stock has more than 40k shares per 5 minute bar. Therefore, based on volume, we cannot exclude penny stocks from our list. Now let’s look at the amount of the list of the biggest beneficiaries. AEZS-Volume GLUU-Volume ANTH-Volume UGAZ – Volume Like the biggest loser, the biggest winner is also heavy in terms of volume. There are still jobs waiting for us to join the management list. Step 3 – Avoid high and low stocks For those who follow the blog, you know that I keep the changes between +/- 5% and +/- 12%. MCP – Down too much Based on this criteria, we can remove MCP from our list as the stock is down a good 12%. We can push for the removal of AEZS and GLUU; however, these are so close to our smallest 5% that the tenths of a percent are not worth considering. Close to 5 percent Based on the removal of the MCP, we were able to reduce the list of penny stocks from eight to seven. Step 4 – Find stocks with tight spreads Let’s look at bid/ask spreads as the next way to identify the best futures. If a penny stock has more than 1 or 2 cents in stock, you really need to think about the level of risk in your trade. Let’s look at the remaining seven stocks to see the bid/ask spread. UGAZ – Spread UGAZ has a spread of 1 cent, so nothing here. ANTH-Spread The spread of ANTH is more than 1% and we are not trading options. That’s why ANTH is not officially on our list. AEZS – AEZS trading is spread by a penny spread, so it’s still running. GLUU – The distribution of GLUU is still in the hunt. To quickly recap, after looking at the spread of the biggest winners, our list is now down from seven to six. Now let’s look at the spread of the biggest losers. PLUG – Spread PLUG passes the sniff test. CYTX – Spread CYTX is still playing. AMRN – Spread Finally, AMRN is still in the game. Monitoring stock price, volume and spread is something you can do quickly without paying a programmer to write custom scans. Now we need to dig into the nature of volatility in stocks to find out how to measure the tolerance that can occur in today’s trading strategy. To measure volatility, I like to use the true average to multiply each stock. As I mentioned in the previous article, ‘How to trade volatility’, I like to divide the ATR value by the share price to get the volatility ratio. Below are the ranges I have developed over the years to look at volatility: (1) Low Key = .001 > .005 (2) Medium = .005 > .01 (3) Looking for action => .01 I want to stick with I’m middle of the road and sometimes I’ll play on the high end around .01. Let’s apply this logic to all of our stocks to see which ones fit my defined criteria. ATRT CARD AMR TRY 0.06 0.01210 0.01210 0.01210 0.01210 0.01210 Step 5 – We were able to apply the necessary censors to cut the list penny stocks that we can buy at manageable levels, now is the time to evaluate the techniques to see how you can day trade penny stocks. For readers who follow the blog, you know I don’t post sales until 9:50 am. This allows me to avoid the craziness of the first 20 minutes, but allows me to enter the trade before 10am the day the market returns. In addition to the timing component, I look for a strong consolidation pattern that swings above resistance or below support on the edge of a breakout. Let’s take a look at GLUU, AEZS and UGAZ charts to see how they measure up in my favorite day trading setup. GLUU GLUU had a good hole and then switched from above and had the morning hole with dinner starting at 9:50 am. GLUU-Chart I sell affiliate marketing, it’s my bread and butter. Therefore, I need the GLUU to exceed their morning high before 10:10 am (which is my cutoff for starting a new trade). As you can see from the GLUU chart, the stock did not make new highs and actually closed the gap on the day. Based on this price action, I would not have placed a trade in GLUU because my system calls for the stock to make a new high between 9:50am and 10:10am. Now that I have explained that I am not going to place a trade based on my trading system,