If you are tired of the corporate lifestyle that means that you are chained to an old cube in a decrepit office, with terrible co workers and demanding bosses, you want to find a path to financial independence. That means spending less than you earn. And that means earning money in a way that cuts down on your commute, your terrible bosses and your need to latch on to the corporate teat. That means day trading with penny stocks.
Penny stocks get a bad rap. Institutional investors like to make fun of penny stocks because they consider them small time and they are always worried about the potential for fraud. But that only comes into play as you buy and hold stocks. If you pick a company with bad management and bad business fundamentals, you are going to lose out over the long term. But the problem with thinking in those terms is that you lose out in the benefits of short term volatility. There is no better feeling than finding that stock in the morning that is going to jump 50% and riding that jump to real profits.
Now you can’t do that with every one of the penny stocks that you come across. But those low-priced stocks are a great place to be able to make a quick profit. Provided that you can find the right ones. The right ones are out there. Learning to use stock scanners and momentum day trading strategies in order to find and profit from these stocks is essential to day trading. You can find these opportunities in penny stocks.
You need to understand what penny stocks actually are. Penny stocks are stocks that trade anywhere from $2 per share up to $10 per share. They are the stocks of small companies that are just trying to make it on the regular market. They may not be on the New York Stock Exchange or NASDAQ, but they are working to get enough respect to get there. When you look at penny stocks, they don’t actually cost pennies. They are small cap stocks from well known companies that can produce big ticket winners. If you use the right strategies that you can learn from professional day traders.
When you are using these strategies to go after small cap profits, you want to understand risk management. Risk is an inherent part of trading, so you need to be able to handle it. You need to have a plan for every single trade that you make, from the big ones to the little ones. You need to have a stop-loss on every single trade. There is nothing better than a stop-loss. That is where you set a percentage of loss that you need to stick to, in order to be in the trade. You can set it right there in the interactive broker you are working with. Stop-losses are essential to proper risk management.
Learning proper day trading strategies is important for aspiring day traders. You need to be able to make real money and you need to be able to do with with spending years at the trial and error game.