Day trading is a great way to increase your understanding of investing, make some extra money and learn how capitalism works. All while getting better at spreadsheets and numbers. Day trading is all about hunting for volatility in the stock market. When you are traditional investor, volatility might be a scary thing. But if you understand how to day trade penny stocks, you can use volatility to make some real money. It is all about finding the right strategy for a given time and place.
When you start out as a day trader, you need to understand the educational journey in front of you. You are going to want to put in effort to understand and learn day trading strategies that can be implemented for profit. Starting in a chat room, watching veteran traders look for opportunities in penny stocks, is an excellent way to get started. Then you can move on to online video courses, where instructors go through the ins and outs of the respective strategies.
Penny stocks, from a day trader’s perspective, are not really stocks that cost pennies. You are looking at companies whose shares trade in the $2 to $10 range. That is where there is lots of movement in share price in a given day, which gives you a chance to implement momentum day trading strategies that could pay off. These companies are not on the major stock exchanges, so they are not subject to the same disclosure requirements as larger companies. This is uncharted waters, so you need proper training as a boat captain of trading to navigate the sometimes choppy seas.
When you get into trading penny stocks, it is all about the technical indicators. When you are looking at your spreadsheets and advanced charts, you are looking for historical data, certain red and green candles and breaking news about a company to determine if they might be ripe for a day trader. You are not looking at market share or long term business fundamentals or the quality of the management team. This is all wonky stuff. This all about the price that day. Watching it, jumping on the stock at the right time and then jumping off when you are maximized your value.
So trading penny stocks is a really exciting notion. Many inexperience traders see the chance to trade really cheap stocks and turn it into a fortune. But if you are not careful, you will end up as one of the 90%. The stats don’t lie. Only 10% of day traders make money. That means the other 90% are marks that are giving up their cash.
The way to be in that 10% is to put in the time. Learn how to strategize properly. Take the day trading classes and practice in a paper trading environment. Paper trading is great because you can learn how to trade in a simulated environment that seems just like the regular market without risking any real cash. It is all virtual money. That is how you get the reps to get good at day trading. It is all about the screentime.