Traders are always trying to keep an eye on the best penny stocks.
They know the potential that is there.
They know that any year, some little cheap stock can hit it big and the next thing you know, they are a mid cap or large cap stock.
You hear about them on CNBC, newspaper, trading journals, etc.
Words can't describe the joy of buying shares of a company at a dirt cheap price.
But how does one know which ones are the best penny stocks? Ah, the million dollar question (literally).
Well, it's not much of a secret, you just got to do some digging.
It's a mixture of technical analysis, fundamental analysis, and news.
Usually all these indicators have to be set, but when they are, lookout! For technical analysis, understand and learn price action.
learn about key support and resistance levels.
If a stock has hit a certain level a few times with decent liquidity, you can bet if it breaks that level, it will break.
As far as fundamental analysis, look at income statements, balance reports, statement of cash flows, and all that other good stuff that you would look at from a mid or large cap stocks.
See how much debt they have, how long they have been carrying debt, is income dropping every quarter or rising.
Just basic stuff.
You always have to be aware of news.
This is what can really take a penny stock that nobody cares about to a major player in the stock markets.
Just think of how many small time pharmaceutical companies exploded onto the scene after their new drug was passed by the FDA.
It may seem daunting to have to go through all this information from a list of penny stocks, but luckily we live in the technological age and there are plenty of ways to automate the process.
They know the potential that is there.
They know that any year, some little cheap stock can hit it big and the next thing you know, they are a mid cap or large cap stock.
You hear about them on CNBC, newspaper, trading journals, etc.
Words can't describe the joy of buying shares of a company at a dirt cheap price.
But how does one know which ones are the best penny stocks? Ah, the million dollar question (literally).
Well, it's not much of a secret, you just got to do some digging.
It's a mixture of technical analysis, fundamental analysis, and news.
Usually all these indicators have to be set, but when they are, lookout! For technical analysis, understand and learn price action.
learn about key support and resistance levels.
If a stock has hit a certain level a few times with decent liquidity, you can bet if it breaks that level, it will break.
As far as fundamental analysis, look at income statements, balance reports, statement of cash flows, and all that other good stuff that you would look at from a mid or large cap stocks.
See how much debt they have, how long they have been carrying debt, is income dropping every quarter or rising.
Just basic stuff.
You always have to be aware of news.
This is what can really take a penny stock that nobody cares about to a major player in the stock markets.
Just think of how many small time pharmaceutical companies exploded onto the scene after their new drug was passed by the FDA.
It may seem daunting to have to go through all this information from a list of penny stocks, but luckily we live in the technological age and there are plenty of ways to automate the process.