Penny stocks are inexpensive, lesser priced, highly speculated stocks that can be found sold at $0.99 or less per share. In minutes, these penny stocks can rise or fall 100s of percentage points, occasionally as much as 400%. Thus these stocks are highly speculative. For the penny stock investor, it can be extremely profitable…the risk is significantly less if you know what you are doing.
Finding out which Penny Stocks to trade:
1. Time and Experience
In order to maximize our profits we are making use of a number of trades using small low risk sums that snowball into the big money. Often, Penny stock traders put in the time, months and years to get a feel of the market and develop a penny stock profit gut instinct. After analysing trends, data, making money on some and others, can he develop an understanding on how to trade penny stocks, and even them he can still on his picks.
2. Penny Stock Analysis Systems
There are many “penny stock trading systems” available. These systems help you identify trends and profitable opportunities as they happen. The main problem is systems takes a lot of time and effort in order to study historical trends..
Two computer programmers have created a piece of software which do the following:
-Scans stocks looking for companies which are forming bullish trading patterns
-Companies who stocks show signs of increase
-Records historical information constantly
-Learns more and more over time
-Outputs recommendations of stocks it thinks should be bought and sold
These recommendations are only made when the software is confident in the outcome, based on the huge amount of data it has analyzed.
In the volatile penny stock trades market, not every prediction and recommendation by the software will be correct. In other words…the software cannot predict every possible outcome. The software does account for the trade recommendations which do not work out and is reported to create gains of 105.28% per week.