subject: Simple Ways To Improve Your Penny Stock Trades [print this page] At the end of the day, micro cap trades aren't easy! No one can deny that. To achieve success, you need a real course of action that follows the stock you're trading. Charts help to some extent, but your plan requires more than technical analysis. So why are there so many traders losing micro cap money? Here are my top 3 variables to go after when choosing penny stocks so you can deter the risk of failure.
The day you start trading, the foremost trade indication is a company with a competitive edge on the market. This requires being engaged in negotiations with established businesses or a fresh source of territory to build and do business in. A core feature you should try to locate is a deal with a larger, more established company when looking for this particular factor in a trade.
The next thing to look at is getting a hold of a micro cap stock that has a positive earnings pattern with more gains to show this year than last. If a penny stock shows signs of dwindling in earnings, I recommend staying away is it is likely not going to make a rise in price. Just the opposite is true, so a steady growth in revenue will likely mean a spike in share value for the penny stock. Just follow the trend in earnings when making a decision to pull the trigger or stay away.
Last of all, make sure to have a stock that has a rising technical analysis pattern. This means a common technical analysis pattern such as a double bottom or an ascending triangle. You will find the majority of these patterns are easy to find and offer a good read on what a stock's next move is, especially if the stock observed has all the other factors in its valuation.
Overall, penny stock trading is a challenge even for those with experience. After all, if it had no complexities, everybody would get in on it! As lucky as it may be, when using correct procedures to trade, you can make it a much simpler task. Take care to consistently look into the profitable penny stocks to watch and you can be a success trading micro caps as well!
by: Dennis Michaels
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