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Do You Check These 5 Things Before Every Tradeš
Good morning all,
Very interesting to see many of you trade BOTH penny stocks (small caps) and options. So Iāll be working hard to create a nice educational series for you on both topics over the next few weeks so be sure to open my emails for great content.
Now, if you've been following penny stocks for any length of time, you already know they can be some of the most exciting stocks in the market. Small moves in the underlying stock can sometimes create surprisingly large percentage gains, which is exactly why so many active traders keep them on their watchlists every day.
Of course, not every penny stock is worth your attention.
One of the biggest mistakes newer traders make is chasing a stock simply because it's already moving. Instead, I like to spend my time looking for stocks that have multiple factors lining up before they ever become the talk of social media.
Here are a few things I always like to see:
Strong News
The best moves often start with a legitimate catalyst. FDA updates, new contracts, partnerships, acquisitions, financing announcements, or major company developments can all attract fresh buyers and increase trading volume.
Heavy Volume
Volume is the fuel behind price movement. When a penny stock starts trading several times its normal daily volume, it tells me traders are paying attention and momentum could be building.
Clean Technical Setup
I always like seeing stocks that are breaking above important resistance levels, moving averages, or forming bullish chart patterns. A strong chart can sometimes be just as important as the news itself.
Small Share Structure
While it's never the only thing I consider, companies with smaller public floats can sometimes make larger moves when buying pressure increases because there are simply fewer shares available.
Growing Interest
When traders, scanners, and unusual activity all begin pointing toward the same stock, it often tells you that momentum is starting to build. That's exactly the kind of situation I enjoy watching.
The truth is, finding quality penny stocks isn't about luck. It's about having a process and knowing what signs to look for before everyone else notices.
Now I have a question for you...
When you're looking at a penny stock, what's the FIRST thing you check?
Do you focus on:
ā¢ News
ā¢ Volume
ā¢ The Chart
ā¢ Fundamentals
ā¢ Something Else?
Simply hit the poll below and let me know so I can further help you as we go along.
What's the first thing you check? |
I personally read as many replies as I can, and your feedback helps me create better watchlists, educational content, and future emails that are more useful for everyone in this community.
I can't wait to see what you have to say.
Talk soon,
P.S. My small cap chat room is open to all from 9 - 4pm ET. Come on in and join like minded traders and be part of the community! RIGHT HERE šļø
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