How to succeed in Penny Stocks trading?

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How to succeed in Penny Stocks trading?
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In the world of investments, nothing invokes more
excitement and thrill than the words penny
stocks. But what is a penny stock? According to
the Securities Exchange Commission (SEC), a penny
stock is a small-cap company whose per share
price is 5 or less. It is understandable why
many people enjoy penny stock trading considering
the price of a penny stock share is far more
affordable than that of a blue chip stock.
Penny stocks experience more jumps and dips than
regular shares, which is why it is possible to
experience big gains and losses while trading
them.
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The following tips will equip you with the skills
necessary to succeed in penny stock trading
Use an automatic stock screener To get some of
the best penny stock company picks, use a
fundamental stock screener. A screener will
filter through companies that are not listed on
major stock exchanges. A stock screener will
expose you to more penny stock companies than
what you will come across on your own. An
automated stock screener can help you select
stocks based on Intrinsic or book value
Earnings, revenue, or growth Cash flows
Dividends
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Rely on Resistance and Support Levels

• Resistance and support levels are analysis
  techniques used with penny stock trading.
• A resistance level is the peak price of a penny
  stock before it heads back down.
• A support level is when the share falls down to a
  particular price and then jumps back up to a
  certain level.
• When looking at your particular penny stocks,
  look at its support and resistance levels.
• Consider selling before it hits the resistance
  level and buying when it hits its support level.

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Analyze Liquidity
To gauge liquidity, multiply the total number of
shares by its price to see how much cash flows
through a particular company. A penny stock on a
major exchange will have more liquidity than on
pink sheets or on Over The Counter Bulletin Board
trading. Highly illiquid share that trade only in
the hundreds per day usually experience major
volatility.
To get a fair price, your stock must have enough
liquidity. Set limit orders to ensure a maximum
share price. This will take some time, but it
will fetch you more savings.
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Avoid stocks that jump on high volume
Poor performing stocks tend to jump in price
during high volume purchases. However these will
quickly fall and correct in price. What should
you do instead?
Purchase stocks that were high in price on
increased volume before but have now dropped in
volume levels. Buy stocks listed at support
levels on decreasing volume.
By implementing the strategies listed above, you
can succeed in penny stock trading.
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