It was another good week with the market with the S&P 500 up 4 days. The SPY is now sitting at $203.20 with the all time high above $213.00. The key level I am watching is $206.00 as this is a potential turning point for the SPY. The overall market is important to watch regardless if you trade stocks like GOOG and AAPL or some lower priced, less well know small or micro cap penny stocks. The big reason is all stocks are correlated with the market.
Correlation does not mean they move exactly identical because there certainly are day’s where a stock can deviate by a large amount from the market (for example during an earnings release), but rather on average. By paying attention to not only the US market, but also the global markets, commodities, bonds, and foreign currencies, even if you never trade any of these, you will have a much better grasp on where the market is headed and how you can use this information to your advantage. The average person doe not realize that we now live in a world with a global markets where all markets are inter-related. Computer algorithms now control the markets and the flow of capital allocation.
To profit off of small inefficiencies and specific markets it’s important to view the market in the context of the big picture (macro economic) first and then work your way down to the specific technical factors which will help you to enter a penny stock at the optimal time where odds of extracting a profit are in your favor. It may sound complicated but I can assure you if you are willing to put in the time to learn, the sky real is the limit.
Trading is about probabilities and rational expectations. You can’t buy a stock at $1.00 and expect it is going to moved to $50.00 in a short period of time or at all. Although the possibility of an outcome like this could occur, the chance is extremely low. It’s like playing the Powerball or the Megabucks where you have a 1 in 250 million chance… Can you win??? Sure but you have a better chance of getting struck by lightning.
Now alternatively buying or shorting a stock with a more realistic expectation such as a move from $1.00 to $1.75 in 3 days, with a target of extracting $.45 is much more probable. Outcomes like this occur much more frequently and a trader can position themselves to profit off these type of opportunities again and again. With the proper risk management, a trader with a small account can compound their earnings and turn a small account into thousands and thousands of dollars.
This is exactly what I do and what I believe everyone should consider doing. Bank accounts are paying .02%. Treasury bonds are paying a measly 2%. Inflation is sitting at 1.8% That doesn’t leave much if any return. If you are sitting in a 9-5 job scraping to get by or in a position where you can afford to put some of your money to work, you should consider trying out my course. The potential to earn serious money is REAL…Click here
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