When it comes to mechanical type trading systems an extremely important concept to understand is what is a robust penny stock trading system. What robustness basically means is whether a system is designed to work in a number of different markets, be it stocks, bonds, forex, futures, options, or cryptocurrencies, and whether it will generate a reasonable amount of tradeable signals. The reason this is important should be obvious but unfortunately, there are many of these guru’s out there trying to push their systems which backtest well (think of forex day trading robots and binary options systems) but in the real world are either not robust or are completely curve fitted (over-optimized) and do not work at all.
You have to be careful and ask the proper questions or else you can end up in a lot of trouble with a penny stock trading system that doesn’t provide enough profitable opportunities. If you start trading the wrong system and hit a rough patch from the beginning, you could end up losing your entire account in one trade and this is obviously something you need to prevent at all costs.
Robust System
The penny stock trading system I use works in any market and on any time frame and is therefore very robust. If you want to day trade it will produce a number of profitable signals. As the time frame you use to trade increases, so will the number of setups that will present themselves. If you decide to go out to a daily, weekly, or even monthly chart for swing trading or position trading, it will work exactly the same.
This means if you are like most people who currently work a 9-5 job or are a student without access to the market for 6 hours a day, you can begin to swing or position trade utilizing my system. As your account size grows and your wealth increases perhaps you will choose to make trading a full-time profession and begin today trade in a short time frame.
Important points about a penny stock trading system:
1. Unrealistically good looking performance
2. Only trades one market or sector well
3. Uses different rules for each market
4. Uses different inputs for each market even if the rules are the same
5. Uses different rules or inputs for initiating buys vs. sells
6. Does not factor in realistic transaction costs like slippage & commissions
7. Uses money management methods that don’t include market normalization
8. Uses static numbers for all markets like a $2000 stop or $5000 profit target (some markets could hit those in an hour and others could take weeks). This may seem to contradict #3 but it does not. It’s ok if markets have different stops and targets etc. as long as they were all dynamically computed and inputs (as opposed to a static predetermined number across the board).
To start learning more about a penny stock trading system: click here