To make money trading penny stocks requires not only knowing when and why to buy a stock but also having the self-discipline required to choose the highest probability opportunities while ignoring all the noise. Everyone spends all this time looking for a magical system when in reality what they should be doing is learning how to overcome the biggest challenge: controlling your emotions.
It’s not easy for most people to wait for near-perfect opportunities because most people are impatient and feel like they are going to miss out and opportunity so they decide to get into the market at sub-optimal times. Doing this decreases your chance of success because you end up chasing stocks past their proper entries.
Stock Scanners:
When trying to make money in penny stocks, I like to compare trading to fishing. When you go fishing, you either locate an area that you know is plentiful with fish or you use radar to find an area. Trading is very similar… In trading, we use either real-time stock scanners (for day trading) or end of day stock scanners (for swing trading) to find “setups” which offer some sort of positive expectancy and fit into our trading plan. These setups are patterns that we are familiar with because we have traded them numerous times in the past and know that they give us an edge.
When you cast your fishing line you don’t know if you are going to catch any fish or lose your bait. In trading, it is the same thing. You enter the market when the system you are using tells you it makes sense. Your system will not always be right. Despite what the general public believes, there is no such thing as a system that you can just put it on autopilot and watch it make your rich. In fact, depending on your style of trading, you may only be right 50-70% of the time. The rest of the time “the fish will take your bait”. The good news is if you execute proper money and risk management, your losses will be small, predictable, and completely manageable.
Fishing to Make Money Trading Penny Stocks:
Just like in fishing where sitting around for hours can lead to catching a huge fish, the same thing can happen in trading. When trying to make money in penny stocks from time to time you will run into situations where your strike it rich. Maybe you will drop your lines, get lucky, and 3 seconds later end up catching 100 lbs tuna. But alternatively, you could sit all day and end up with a 2 lbs mackerel or nothing at all. Trading is no different. The only thing for sure is if you fish day in and day out you are guaranteed to come out ahead in the longer term by merely practicing repetition. Trading is exactly like this.
I’ll end with one of my favorite quotes: Give a man a fish and you’ll feed him for a day. Teach a man to fish and you’ll feed him for a lifetime. This is exactly what I want to do for you. I could offer alerts but the fact is you can’t rely on somebody else and expect to have long-term success. Fortunately, if you learn a proven trading system and make it your own, you have a proven way to start extracting serious profits from the market. It’s up to you whether you think you have what it takes to succeed in trading.
To start learning how to make money trading penny stocks click here.