These are fairly broad penny stock investing tips rather than actual recommendations.
The idea is to give you a grounding on what to look out for when selecting the best penny stocks to trade.
Look For The Annual Low
Every investor's aims to buy at a low price and sell at a higher price but remember, penny stock investing is more volatile.
Blue chips have their highs and lows but they are more likely to trend over time in one direction. Penny stocks being more volatile, will fluctuate more within a trading range.
As a penny stock reaches it's high for the year penny stock investors will look to take profits and this drives the price down. On the other hand, as the penny stock price heads towards it's annual low, people once again see it as a good deal and start buying again, forcing the price upwards. So, look for penny stocks near their annual low, the chances are buyers will re-enter the market and the stock price will rise.
Look for the Annual High.
As stated above, many penny stocks, after reaching their annual high, will come under pressure that drives the price lower. However sometimes, the stock can sustain it's high price and this will attract more investors pushing the price still higher.
The company may have sound fundamentals or have just made a positive announcement on earnings or new developments.
Look For A Temporary Dip In Price
A penny stock's price can dip temporarily due to a fall in performance of a similar stock or a drop in OTC market overall.
Look for a temporary drop and also for signs of recovery. You need to find out is the dip has been caused by factors not related to the company's performance.
Look For High Volume Penny Stocks
Small trades in low volume penny stocks can impact the share price sometimes making it difficult to trade at the price you want. Trading in high volume penny stocks let's you make substantial trades without impacting the price.
As trading volumes increase so does market maker participation increasing competition and narrowing price spreads.
The market makers compete against each other to drive the buying and selling prices closer. This narrower spread makes it far easier you to turn a profit on trading high volume penny stocks.
Formulating a Forex Trading Plan
Before you begin developing a forex trading plan and approach that works best for you, you need to give some thought as to what resources you have available for your forex trading.
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