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How to Find Penny Stocks
There are various ways that you can find hot penny stocks, such as the news media, online forum, and penny stock screener.
We offer a free penny stock screener that finds the top penny stock gainers and losers of the day with price and volume filter.
Penny Stock Screener
The penny stock screener allows you to do exactly that. You can set a price and volume filter to search for stocks that match your criteria.
If you only want to trade penny stocks under $1, you would select the price to be under $1. To stick with high volume stocks, you can set the minimum volume to be 500,000. In addition, you have the choice between penny stock gainers and losers which you can select to see the winners or losers of the day.
Please note the penny stock screener only scans for stocks listed on NASDAQ, NYSE and AMEX. If you want to find penny stocks listed on the OTCBB market, use the OTC stock screener which is free to use.
OTC Stock Screener
Just like the regular penny stock screener, OTC stock screener scans for stocks with price and volume filter. Most of the OTC penny stocks are trading below $1, and many trading under 10 cents.
Keep in mind, the OTC market is much more volatile than stocks trading on the regular exchanges like NASDAQ penny stocks. Therefore, it is riskier to trade penny stocks on the OTC market. To reduce risks, traders should trade only the stocks with huge volume.
In addition, you can also use our technical stock screener to search for penny stocks that has a certain type of technical indicators or stock chart patterns.
The technical stock scanner allows a trader to search for various technical indicators such as MACD, RSI, stochastic, moving average crossovers, gap up, gap down, candlestick patterns and more. Traders have the options to search for stocks that are bullish as well as bearish stocks with these technical indicators.
Penny stock traders are able to adjust the price and search for stocks under $1 with technical setups. As usual, one can limit his research to only high volume penny stocks by selecting stocks with trading volume over one million or more.
Penny Stocks APP
With the convenience of mobile devices, you can now find penny stocks to watch on your phone.
For iPhone users, you can install the penny stocks app for free. Just like the web based version, you can scan for stocks based on price and volume. In addition, you can quickly navigate the stock charts for each symbol.
For Android users, you can get this penny stocks app. The app has great rating with thousands of good reviews from users. Just like the iPhone version, you can scan for stocks with price and volume filter and the ability to lookup the charts for any symbol.
In a nutshell, here are the penny stock screeners we discussed above.
- Penny Stock Screener
- OTC Penny Stock Screener
- Technical Stock Scanner
- Penny Stock Screener for iPhone
- Penny Stock Screener for Android
Penny Stocks Trading Strategies
There are many things to learn before you get into world of penny stocks. First thing to notice is penny stocks are much more riskier than regular stocks trading at a higher price.
When it comes to trading penny stocks, volume is an important indicator as there are many manipulation strategies that the big players use to exploit with low volume penny stocks. One such strategy is the famous pump and dump strategy, where big players issue stock recommendations and false alerts to boost the stock price artificially only to dump their positions at a higher price.
For this reason, traders should only stick with penny stocks with high volume. By trading only high volume penny stocks, you also save in slippage charges as the spread is higher for stocks with low liquidity.
Spread is the difference in price between buy and sell or bid and ask prices. For example, a stock can have a quote of $0.50 / $0.55 meaning if you buy the stock, you would pay $0.55 and someone selling the stock would only receive $0.5. That is a 10% difference, and sometimes the spread could be much higher for stocks with low trading volume.
Sure, you can use a limit order which you should to avoid big spreads. However, sometimes the volume for a stock is so low that your trade will never get executed at the price you set.
To be able to trade penny stocks successfully, you will need to develop a profitable system and acquire the mental disciplines to help you stay in the game. In order to make money trading penny stocks, losses are inevitable. You will need to accept the fact that you are going to have big losses on some stocks, and be prepare to trade with money that you can afford to lose.
Following are resources that you can read to learn more about penny stock trading.
How to Trade Penny Stocks
Penny Stocks for Beginners
Penny Stock Strategies
Top Trading Books
Penny Stock Books
In general, penny stock investing is hard and we do not recommend holding penny stocks for the long term. There are thousands of penny stocks and many go under within a couple of years. To increase your odds of winning in penny stocks, read these three books about penny stocks and stock trading.
1. The Complete Penny Stock Course
The Complete Penny Stock Course is written by Jamil Ben Alluch, which is a book about short term penny stock trading where you will learn about the basics of day trading, risk management, building profitable trading strategy, and real world examples and case studies
2. Penny Stocks For Dummies
This book is more about long term investing in penny stocks than trading. Author Peter Leeds introduces the basics of penny stocks and how to make sound investments. You will also learn how to find penny stocks with growth potential in strong market sectors.
3. Trading in the Zone
Trading in the Zone is written by Mark Douglas, and is a must read book for penny stock traders. This book shows you why having a profitable trading strategy is not enough to beat the game of stock trading. In order to make money, you will need to develop trading disciplines, have a plan and gain an edge on every trade you make.
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