Study These Penny Stock Trading Trends 5.00 / 5 (100.00%) 1 vote

Taking a position to trade penny stocks is usually a cheap but risky investment. This form of investment is considered to be cheap due to the fact that penny stocks can retail as low as less than a dollar in most cases; hence the name penny stock. It is also considered a risky investment since the risk exposure is somewhat higher as well as the volatility of the penny stocks. Trading in penny stocks is definitely not meant for everybody but for a special breed of stock traders. In order to be successful in this form of trading, traders need to take the time to conduct proper research regarding the penny stocks they are interested in trading in order to avoid significant losses. In this article, we will look at several penny stocks which have interesting trends and try to use them to identify cases when a penny stock trader can minimize risk when trading in these stocks.

Study These Penny Stock Trading Trends

IBIO Inc.

iBio Inc. is a small cap company that specializes in bio-tech. The bio-tech companies are known to be very volatile and at the same time very risky. Proper selection of entry and exit points is of utmost importance when it comes to penny stock trading as in the case with IBIO stocks. The entry points can be determined by the support prices. For instance, if IBIO at one time trades at a swing high of $0.81 which tests the support level, a strategic entry point can be around $0.50. In trading sessions, traders are required to close their positions if the support fails to hold.

U.S. Geothermal

This is yet another potential small cap company which is currently holding at its level of support. For the past 18 months, the trend line has been over the stock’s price. An entry point that ranges between $0.051 and $0.499 is ideal for bullish traders. To avoid the trading set up, a good trade exit point will be lower than the trend line. It is however advisable for traders to pay close attention when the stock prices near either the support or resistance levels since they often become very volatile at these points.

Minco Gold

In terms of popularity, Minco Gold Corp can be termed as being among the top cream when it comes to penny stocks. Early in the year, the stock experienced a strong move which eventually set the stock to a pattern that can be best described as a sideways consolidation. When such a situation occurs, some difficulty is experienced when it comes to predicting the direction of the market price.

Traders can pay close attention to this stock since an increase of orders can happen when the stock price moves above the trend line. When the price does move above the trend line, it tends to create profitable trading opportunities.

Conclusion

It should be well understood that extreme movements in the underlying stocks’ prices can translate to huge profit margins. However, this is not usually the case with most rookie traders as they end up incurring losses. The reason behind these losses can always be traced back to poor planning of entry and exit points. If a penny stock trader strategically plans his/her entry and exit points to perfection, penny stocks trading can be a very lucrative venture.