How To Begin Trading Penny Stocks – Technical analysis (TA) involves the careful study of stock patterns and trends. While this skill set can be intimidating at first, even beginners can incorporate a few select AT techniques into their investment strategy with great success.
TA can be especially useful when predicting penny stock movements due to its volatility, as long as there is enough trading volume to support the patterns you are trying to find.
How To Begin Trading Penny Stocks
Below is a list of some penny stocks with interesting technical setups. Remember to move quickly and exit your position if the stock does not behave as you expect, as this could mean that the trend or signal has changed or failed.
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Some of the options described below may no longer be relevant or complete by the time you read this article. Please do your own due diligence. Keep in mind that penny stocks are very volatile.
GOTU is a China-based education technology company with a market capitalization of approximately $600 million as of January 2, 2023, making it a small-cap company. The company’s core expertise is in providing online K-12 courses worldwide. It also provides online after-school tutoring for K-12 students in mainland China. The company was founded in 2014 and is headquartered in Beijing.
In January 2021, GOTU traded as high as $149.05. Since then it has been in a long decline. Last November, the stock traded for less than a dollar a share. He has since recovered and seems to be doing better. After recovering from its November 2022 lows, it went on an impressive price rally. The highest value of BOY stock at the end of December 2022 was US$4.25 (see chart below). It had a short reaction, but looks ready to try to retest the December highs.
Vyant Bio Inc. (VYNT) is a small-cap company in the healthcare and biotechnology industry. Its market capitalization on January 6 was about $4 million. It was founded in 1999 in Cherry Hill, New Jersey. The company is involved in drug discovery for complex neurodegenerative and neurodevelopmental disorders.
Examining Penny Stocks With Technical Analysis
After gapping to a high of $84.50 on February 10, 2021, the stock reversed to enter a steady decline for the rest of 2021 and 2022. The gap could be on January 5, 2023 (see chart below), mark the discovery of the last stock pool. The entire gap area becomes support. Therefore, if the stock can hold above the lower gap when it tests support, it will be a successful test and could indicate more positives for the stock price.
Safe Bulkers Inc. is a small capital shipping company in the industry sector. (SB). The stock declined and entered a decline in June 2022. It found support at its 200-day moving average and continued to trade sideways, making a series of lows in the process.
Positive price divergence and moving average converging divergence (MACD) are further evidence of a possible future reversal in the previous decline. The stock price has now moved above the 50-day moving average and the moving average is rising (see chart below). It looks like the price is continuing to trade sideways, so a definitive break to the upside will confirm that it has left its decline behind and may be entering a new uptrend.
Atara Biotherapeutics Inc. (ATRA) is a small-cap biotechnology stock in the healthcare sector. After touching a high of $28.20 in December 2020, its price dropped to a low of $3 in August 2022.
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However, green shoots of promise appear, after a successful test of the previous levels. In December 2022, the stock moved lower and found support at the August 2022 low. This was a successful test, and the stock continued to move higher into December 2022 (see chart below). It is possible that the support will hold and the price will continue to rise, but there are no guarantees in technical analysis.
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Scanning stock the old fashioned way is time consuming… It’s a surefire way to miss out on great trades. A stock monitor makes life a lot easier, especially when trading penny stocks.
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Not sure how to use one or which one to use? This post will help you get started.
It is a tool that allows traders to filter stocks based on certain criteria. A penny stock screener does the same with a focus on penny stocks.
You can filter by almost anything: price, highest earnings, volume, sector, market cap… Screener can filter thousands of stocks in seconds.
Penny stocks are small businesses. These are typically stocks with a market capitalization of less than $1 billion that trade for less than $5 per share.
Penny Stock Screener: How To Use One In 9 Steps
They can be new companies in an evolving sector, or they can be established companies at risk of bankruptcy.
Trading penny stocks is very different from trading large companies. It requires a different mindset and a different trading strategy. And that’s just one of the things we focus on at SteadyTrade. Join us to complete your trading and market experience.
If you trade penny stocks, you need a penny stock monitor. This is what helps you narrow your focus and quickly find the stocks that best suit your account size and trading plan.
Penny Stock Screenings do not eliminate the need for research. But they can be of great help when building a watch list. Need help creating your boards? Learn from my process every week – sign up for my free weekly watchlist here!
Skill Sets Required To Trade Penny Stocks
Using a penny stock screener isn’t complicated, but it can take some time to set it up the way you want.
A stock control will be based on a good trading platform. Our platform comes loaded with over 40 scanners. And of course you can customize your scans.
To search for stock, enter your criteria. This could be the trading volume, the biggest winning percentage, the price or the market capitalization. Then click “Search”. That’s all. You will get a list of stocks.
From there, it’s up to you to do more research and narrow down the list of business ideas.
How To Trade Penny Stocks Like A Pro
To trade penny stocks, you technically only need a few things: a stable Internet connection, a hard PC or laptop, and a funded brokerage account.
Bad! There is much more. Smart traders add more to the process, an educational and advanced tool like a penny value monitor.
There are a wide variety of approaches, strategies, and styles to penny stock trading. Let’s look at three ways to negotiate:
Most stock trading in the United States takes place on two exchanges: the Nasdaq and the New York Stock Exchange (NYSE).
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OTC markets and most major exchanges operate Monday through Friday year-round, except for US holidays. Trading sessions take place from 9:30 am to 4:00 pm. This daily session is where most traders are. This is where you’ll find most of the sound.
Unlike Nasdaq and NYSE, OTC markets do not allow pre-market and after-hours trading. Trading in these sessions can allow you to take advantage of signals that the stock is likely to move the next day, for example if there is overnight news.
Please note: Trading outside normal market hours can be difficult. There is generally much less liquidity. This means that it is harder to fill a trade without causing the price to crash. Make sure you know what you’re doing before you enter the field after hours.
One of the best ways is to use a penny stock filter. A good filter could completely change your approach to trading. I’ll show you how in a bit…
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You should also be aware of the power to move the stock. We call these catalysts. Learning how to find a catalyst can help you find opportunities. And you don’t have to do it alone. STT’s Breaking News chat room alerts subscribers to breaking news that could cause big moves in stocks. Check out a 14-day trial of STT + BNC for just $17 here.
A penny stock monitor can help you find penny stocks that are showing signs of breaking out. You can then use technical analysis to see if these stocks are potential trades.
A penny stock screener takes a lot of the work out of finding the best stocks to trade. Screeners scan stock scores that meet the criteria you set.
Big picture: You are looking at the movements of the market herd. Once you understand what you’re seeing, the patterns can tell you what the herd will do next.
Best Penny Stocks With 10x Potential To Buy 2022
When you can wait
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