Day Trading Alerts

If you are familiar with the movie “Wolf of Wall Street” or Jordan Belfort’s story, then you
most likely to know what Day Trading Alerts are. Simply put, Day Trading Alerts is a common
word in the U.S. used to refer to typically low priced stocks that can range between $5 and
$10. These stocks may also be referred to microcaps. Day Trading Alerts trade between
$0.0001 and $4 per share with these stocks showing extreme price fluctuations of 25% to
over 100 within short trading periods. What this means is that you can maximize in great
price increases and sell your stocks making lots of money in the process.
Day Trading Alerts, contrary to the name, are hardly ever just worth or priced at a
penny. These stocks are also known by another name in other countries outside the United
States: cent stocks. Day Trading Alerts are, legally speaking in the United States, securities
whose market prices are less than $5 per share, not listed or traded in any national
exchanges like the New York Stock Exchange (NYSE) and not able to meet other important
criteria set by the Securities and Exchange Commission or the SEC. In Europe, particularly
the United Kingdom, Day Trading Alerts are securities that trade below £1 per share. In the
United States, Day Trading Alerts are normally transacted over-the-counter, i.e., outside
formal or centralized stock exchanges, like the Over-The-Counter (OTC) Bulletin Board or
via Pink Sheets. The Financial Regulatory Authority (FINRA) in the United States operates
the OTC Bulleting Board for members who subscribe to said medium. Unlike exchanges like
the NYSE or Nasdaq, the OTC Bulletin Board isn’t electronic. In the United States, Day
Trading Alerts trading is covered and regulated by rules and regulations defined by the
FINRA.
Companies that issue Day Trading Alerts normally have low market capitalization due to the
low market or trading prices of their shares. As such, Day Trading Alerts can be quite
unpredictable or volatile, which makes some people to be a little conservative when it comes
to investing in them as they are usually tied to the success or failure of a business prospect.
Firms commonly float these stocks with little or no real assets such as prospecting firms that
deal in oil, mining and such like activities. These types of firms usually have short, fluctuating
or no consistent record of accomplishment of earnings, which makes trading in Day Trading
Alerts – however lucrative – high risk.
Further, volatility can at times be due to manipulation by investors with access to funds that
are even bigger than the stocks’ total market capitalization. Investors who fall victim to
manipulated Day Trading Alerts are often into get-rich-quick schemes. The actual face value
of a penny stock will be manipulated and turned big. So in essence, the price of the stock is
not an indication of the company’s true worth. So if you give into this kind of a stock, then
you must remain prepared for any consequence that the stock might throw up. Given such
risks, you’ll need to tread carefully if you’re considering getting into or are already trading
in Day Trading Alerts in order for you to take calculated risks that will enable you to
significantly increase your chances of enjoying huge returns and minimizing your risks of
losing money.
Most of these low priced companies do not attract many investors because of their zero
trading volume; however, the good thing is that you can maximize on this, make sound
investments decisions and reap huge returns.
Understand This Before Trading Day Trading Alerts
Day Trading Alerts, as you know, are low valued stocks that are traded in the market or over
the counter. These stocks will see sharp rises and falls and it is up to the trader to capitalize
on this trend. But before you can go ahead and start investing in Day Trading Alerts, you need
to know some few basic things about Day Trading Alerts.

Information
Because Day Trading Alerts aren’t publicly traded, i.e., not listed on big and organized
exchanges, adequately available information on most of them may be quite limited for the
investing public, which makes it extremely difficult to get some credible information since
companies listed on the pink sheet. It’s because companies that issue Day Trading Alerts
aren’t required to file with the Securities Exchange Commission. As information on such
companies aren’t as abundant as for those whose stocks are listed on big organized
exchanges like the NYSE, the relatively higher potential earnings come with higher risks as
well. You may think your broker will provide you with enough information about these
stocks. But he or she might know just as much as you would. The two of you are in the same
boat. In that, he might have a slight upper hand and know a little more about it than you
would. So it will not hurt to find out from them about it. Call them up and tell them the name
of the stock. If they find the information for you then well and good but if they don’t, then
don’t worry, if you have heard of the stock as a good one then it surely must be good!

Liquidity Risk
What is liquidity? In the context of investing in Day Trading Alerts, it’s the ability to be able
to sell – also known as “liquidate” in financial circles – your Day Trading Alerts at the exact
time or price that you need to. Liquidity risk is the risk or the possibility that you may not
be able to liquidate your penny stock holdings when you need to and at the price you want
to.
Day Trading Alerts trading poses this risk especially when supply is greater than the demand.
As earlier indicated, not many people are usually very willing to invest in Day Trading Alerts
because most investors, unlike you, are too risk-averse and would rather settle for average
returns just to be able to lower their risks. Low liquidity will mean that there will be a
difficulty in finding a buyer for a given stock, as this might mean that you lower your share
price to an extent where it might be deemed attractive to other buyers in the market. Low
liquidity is normally a loophole for some traders to manipulate the prices of stock. So
understand what you are getting into before you decide to buy a stock for yourself. The
liquidity of a stock is always a matter of consideration for any trader, small or big. After all,
you cannot hold on to a penny stock forever and will have to duly dispose it off at some point
in time. So it is important that you pick those that are actually being traded regularly and you
are not choosing those that are traded randomly or once in a blue moon. Your diligence is
everything when it comes to picking Day Trading Alerts.
Common Terms Used In Penny Stock Trading
If you want to invest in Day Trading Alerts successfully, you would need to be aware of some
few things. These terms are regularly used in the penny stock trade market and if you wish
to be part of it then it is important for you to be well versed in them. They will give you a fair
idea of some of the ways in which the penny stock market operates and help you understand
the basic pattern that you must follow when you wish to get started in this trade.

Day Trading
This is a common term used in Day Trading Alerts investment. Day trading refers to the
buying and selling of Day Trading Alerts with the goal of making a profit from the difference
between the buying and the selling price, on the same day. So in effect, the trader aims at
buying the stocks when they are priced lowest and then sell them at the highest price during
the day. This can be done by choosing the buy and sell triggers. It will be tough at the very
beginning to choose the exact numbers but with time, you will know to predict how high a
stock will rise. Remember that the stocks will not follow a predictable pattern and you must
understand it by studying it carefully. Some stocks might rise during the wee hours of the
market and then fall and some might follow the reverse pattern. It is important to note that
in the U.S unlike in the U.K, where Day Trading Alerts are traded in the stock exchange, Day
Trading Alerts are traded over the Counter Bulletin Board and pink sheets.

Due Diligence
Before making a decision to buy a stock, it is prudent to practice the rule of due diligence.
Due diligence is a common terminology used in trading of Day Trading Alerts and is usually
abbreviated as DD. In this case, DD is simply, doing some background research before
deciding to buy a stock. Remember that you cannot gamble with these stocks, as they can be
quite unpredictable. You will not know if the stock is good or not based solely on its price
fluctuations. You have to study it carefully and understand whether or not it will give you
good returns. Pick up the stock’s data and start going through it carefully. Don’t assume a
stock as being good just because many people have bought it. There is a risk of over buying
that will loom over the stock and it is important for you to carefully evaluate the stock’s true
worth and use your DD to separate the good ones from the bad ones.

Stop Loss Percentage

Another term you will hear often is Stop Loss Percentage. This is simply the maximum
percentage at which a trader can take a loss. If you happen to set your stop loss at say 10%
and the value of your invested stock happens to fall by 10%, you can willingly relinquish your
shares and accept the 10% loss to preserve your capital. This is extremely important for a
penny stockholder. Most traders will worry that they will have to settle for a loss when there
was a chance to not take an exit on it and wait for it to move forward again. But that is the
wrong thought to have. If you wait for it to go forward then you might waste time. Instead,
you can either assume position from the same place or move to a better stock. In all, you will
not risk your capital getting stuck in a place and have the chance to use your capital to your
advantage by implementing the stop loss mechanism. Let us look at an example. Say you
bought 100 stocks of company “A” at $0.95; you are hoping it will go up to $1 by the end of
the day. But you must place a stop loss of 10% in case it does drop to that price. So set your
stop loss at $0.88. This will ensure that you exit at that point and don’t have to take it if it
goes any lower than that.

Swinging
Swinging refers to exiting at the stop loss mark and then assuming a fresh position from
there itself. The basic idea here is to capitalize on the stock’s volatility and cover the losses.
The general belief is that a stock will steadily rise in value once it hits a low. So as soon as the
stock exits at the lowest mark, it will start rising again. Most traders prefer to place another
stop loss at this point in time to ensure that they don’t undergo a loss. Again, you must choose
the 10% cover and set the stop loss. Don’t underestimate the true value of the stop loss
mechanism and put it to regular practice.

Ask
This is the practical share price acceptable at a particular moment at which you can buy
shares. It is the price that you are asking for a share. You are valuing it at that price and think
it is the best value for the stock. The ask price will depend on your analysis of the stock. You
will know to judge a stock only after studying the market for some time. Many people set
such low values and you wonder if they are wrong in setting such a low ask price. But then
you will realize that the stock’s price has really fallen to that price and that they have truly
gained from their assessment. Similarly, you must also study the markets carefully and then
decide on the ideal ask price for a share.

Profit Percentage Gain

This is used to refer to the maximum percentage at which a trader has pegged their profits.
A trader will always enjoy profits whenever the stock rises by set profit Percentage gain. This
is obviously calculated based on the buy and sell price of the share. Every trader will have
expectations out of their investments and they will decide on the percentage profit based on
what they wish to gain from the difference in prices of the stocks.

Bid
Bid refers to the buying price of shares.
Here is a brief process of how trading in Day Trading Alerts is likely to go:
1. Start by practicing due diligence. This will involve doing some research beforehand to
come up with a list of stocks you might consider trading for that day.
2. Use your own judgment to gauge on the reaction of the market and then pick one stock.
3. Buy the shares.
4. Sell your shares when the percentage profit gain of your choice has been attained. Go on
and on trading in that procedure for trading in Day Trading Alerts and make profits. We will
look at this process in detail to help you get started on trading in Day Trading Alerts.
Volume
The volume, as you know, is the total number of shares that are traded at any given point in
time in the share market. This volume keeps fluctuating every second as some ones ask price
will match someone’s bid price. This type of matching can occur all through the day and at
no point will the volume fluctuations remain stable. They will keep fluctuating all through
out and you can keep looking at it in your software. Day Trading Alerts will also have volume
fluctuations all through the trading hours and at no point will it stabilize unless the stock
price freezes owing to excess buyers or excess sellers.

Broker
The broker is your helper who trades the stocks for you. You cannot trade in the stock market
without being a member of the stock exchange. The broker will represent the company that
is a member of the exchange and help you buy and sell the stocks. He or she will also advice
you on a few good stocks and tell you whether or not you should buy a stock. But the final
decision rests with you and you will only have to trust your judgment combined with your
research on the stock. You have a choice when you [ick a broker. They can either be a full
time broker or a part time broker. A full time broker is one who will do everything for you
including buying and selling stocks, looking at the trends, alerting the client if a good deal
comes by etc. A part time broker on the other hand will only buy and sell your stocks. They
will not make any decisions of their own and will only do, as their investor will say. The
former will always charge you a lot more commission as compared to the later. You have to
look for a broker that is not only reliable but also trustworthy. It is always a good idea to get
a recommendation for a good broker and you can ask a friend or someone that you know
who invests in stocks to refer you one. You must also do a quick testimonial check of the
different brokers and brokerage firms in your area. The testimonials are proof of whom you
should trust and whom you must avoid.

Commission
Commission is what the broker will charge you for the services provided. He or she is putting
in efforts to help you buy and sell stock and also suggest some. For that, they will charge you
a commission. But not all that is deducted will go to the broker alone. Some of it will go to
the brokering company as well. The commission varies from company to company and you
must pick the one that has on offer the lowest rate. But if you don’t wish to compromise with
the quality then you can choose one that offers a higher rate but good brokers. However,
there also you have to perform a check and ensure that they are good brokers and giving you
service that is apt for the rate. If possible, you have to try and find brokers that have a good
reputation.

Limit order
Limit order refers to the sell price that you wish to attach to your stock. This sell point is
where your stocks will be sold. You have to instruct your broker and tell him clearly that you
will not settle for a penny less. This is mainly because you would have calculated a
percentage gain and even a short margin could make a big difference in the gain. There is
software that allows you to set the price yourself so that your stock is sold as soon as it
reaches the price. You don’t have to keep tracking the price and will be notified as soon as
the stock is sold.

Portfolio
Your portfolio is your investment sheet. It will contain all your investments and mention
details of all your holding stocks, sold stocks, stock number, stock value, bought price, sell
price, realized profit, unrealized profit etc. All of these are important for you to gaze upon in
your portfolio statement. You will also see the trend that you have been following in terms
of buying and selling your stocks. You must always look at your portfolio at the end of the
day to cross verify whether or not your stocks are being traded correctly. If you spot any
errors then have it rectified at the earliest.

Stock split
Stock split refers to a company splitting the stock in two to increase the number of stocks
available in the market. This is done when there is a lot of absorption and not many people
are floating their shares in the market. The company will be interested in pumping back the
shares and increasing their market capture. This is a good thing for Day Trading Alerts and
if you are holding any at the time of announcement then you will receive what are known as
bonus shares. These will help you earn a greater profit.

Bullish reversal
A bullish reversal refers to the price of the stock going upwards. This happens if the lowest
is lower than the previous day’s low and the current price is higher than the previous day’s
close. So the stock will move upwards and the trend will help you realize a profit if you are
holding on to any of the company’s stocks. This trend will occur when there are more buyers
for the stock and less sellers. You can capitalize on the situation and sell all your stocks to
arrive at a profit. . The stock will continue to rise up and will give you the chance to dispose
off your stocks for a profit. But you have to be a quick decision maker. It is quite tough to
predict whether the price will continue to rise or it will remain stable. An experienced hand
will be able to judge the decision well and tell for sure in which direction the price of the
stock is headed.

Bearish reversal
The bearish reversal is the opposite of the bullish reversal. It occurs when the current price
is lower than the yesterday’s close. This pattern is a downward trend. It appears when many
people sell their stocks all at once. The trend can cause you a few losses on certain bad stocks.
Once this pattern comes about, it will be difficult to say how the price will move. It can keep
moving downwards or can take a good turn and start moving upwards. In such a case, it is
always better to wait than to dispose off the stock. Allow it to stabilize a bit and then take a
call on it. If you think it will continue with the bearish trend for some time then it is best to
sell the stock short.
The theory of demand and supply
As you know, demand and supply is what mainly affects the prices of stocks. The same theory
extends to Day Trading Alerts. When a stock is in demand and the supply is low then its price
will surge up. This is mainly because there will be lesser stocks circulating in the market and
more people wanting to buy it. In such a case, it is important that you check the number of
sellers in the market and the number of shares that exist of the company. You will be able to
understand whether the price will really rise high and if it is best for the stock to adopt a
bearish bar reversal (explained later in this book) before opting for it.
The opposite happens when you the supply of the stock is high and there is very little demand
for it. You will see that the price of the share has dropped drastically. There are many stocks
floating in the market but very few buyers for them. It will obviously cause the prices to drop.
You have to understand that it is a good opportunity for you to enter with the stock. You will
get it at a nominal price, which will fit right into your budget.
You can also decide to buy more of the stock during the dips. That will help you average the
prices out. Averaging is a great tool that you can use to help reduce the overall price of the
share. Suppose you had bought a share for $2 and 100 shares. You paid $200 towards it. After
a while, the price drops to $1. You must accumulate some more shares and increase it to
another 100 shares bought at $1 each. This will average it out for you and you will have 200
shares at a price of $1.5 each. Doing so will help you ring in a bigger profit.
These are just some of the terms that you must understand and gaze upon when you wish to
indulge in penny stock trading.
FAQs About Day Trading Alerts
When you start trading in Day Trading Alerts, it's obvious that you will have a few questions
pop into your mind. In this chapter, we will look at some basic questions that get asked on
the subject and answer them to help you understand the concept better.
Let us start.
Are Day Trading Alerts a part of the stock market?
Yes. Some Day Trading Alerts are traded in the stock market and are part of Ney York Stock
Exchange and NASDAQ. You can ask your broker to find the best stocks for you from these.
You can also look for stocks that are priced lower than $5. You can also trade in them with
pink sheets but that is not really recommended. Apart from these there is also the over the
counter method of issuing Day Trading Alerts, which is the most preferred method in the
world.
Are Day Trading Alerts good for me?
Yes. Day Trading Alerts are a great choice for both beginners and established traders. Day
Trading Alerts will help you understand the stock market and how it operates. Once you start
trading in Day Trading Alerts, you will know exactly how the stocks rise and fall and whether
or not you must sell the stocks that you hold. Although it is best to first observe the market
as an outsider and then start trading, you can start off with it if you have the confidence to
do so. Day Trading Alerts will pay you good money provided you time the market and know
exactly how to pick and hold the right stocks. If you have already been investing in the stock
market then you will easily slide in and make a smooth transition. You must understand the
difference between regular and penny stock trading though and formulate a different
strategy to make it big.
Is it for beginners?
Yes. Day Trading Alerts are for everyone. Right from young hands to old hands, it can be
adopted by anyone interested in diversifying their portfolio and making good money out of
their investments. You don’t really have to be an expert or someone that is educated in stocks
to invest in the market. It is quite enough if you have a basic knowledge of how the stock
market operates. There is also no limit on how much you can invest in it, which makes it a
great choice for beginners.
Can I make good profit from it?
Yes. It is possible for you to make a good profit out of your Day Trading Alerts. Day Trading
Alerts work quite differently as compared to regular stocks. They are bought and sold on a
daily basis. So within a day, you will have you profit or loss. Generally, most people realize a
quick profit on these stocks, as they are extremely volatile. They will buy the stocks a certain
price in high volumes and then sell them off at a higher price within a few minutes. This will
give them the chance to make a big profit on it.
How much should I invest in it?
That choice is yours. You have to decide on a certain amount of money and set it aside. The
amount can be as low as $50 or as high as $500. It is possible for you to remain in a wide
investment range when you opt for Day Trading Alerts. Practice makes perfect and you will
be able to decide upon the best rate with time. You will know exactly how much to have in
your account for your Day Trading Alerts.
Is it easy to trade Day Trading Alerts?
Yes. It is quite easy to trade in Day Trading Alerts. You don’t have to be a market or a math
expert for it. All it takes is a little knowledge about the stock market and you will be able to
start trading. This book will act as your one true guide for you penny stock investments. You
will be able to trade with ease and if you have any doubts then you can go through this book
again. You will find answers to all your questions and be in a position to make lucrative
investments.
Is it sustainable?
Yes it is a sustainable option. You can remain invested in Day Trading Alerts for a long time.
Even if you buy and sell these stocks within the same day, you can continue doing it for a long
time. It can be for a year, two years or more. All it takes is patience and faith in the trade. If
you possess the two then you will surely see positive results. Even if it takes a month or two
for you to understand how it works, you have to keep the good work going and you will
surely be rewarded for it at the end.
Are there risks involved?
Yes. There are many risks involved in this type of trade. You have to understand that it is
important to know about all the risks that are involved in such a trade. Once you know what
might go wrong, you have to be prepared to combat it effectively. The biggest risk
Can I sell them short?
Sometimes yes. But it is not advisable to do so. The main intention is for you to make money
out of your penny stock investments. If you sell them short then you will not be able to make
the money back. If the stock is not faring well at all and you have been holding on to it for a
long time then it is best to sell it short. At least you can pump the money into a better place.
Can I stop anytime?
Yes. The choice to start and stop trading in Day Trading Alerts is completely up to you. If you
think you have had your fill and experienced enough profit from your penny stock
investments then you can stop investing in them. But you have to decide for sure whether or
not you wish to discontinue with the investment choice. You can also start trading in it at any
time you like.
Can I do just Day Trading Alerts?
Yes. The choice is completely yours. If you think you can make a lot of money through Day
Trading Alerts then you can do so. But remember that you will have to trade carefully as you
are investing your entire capital in just one form of trading. It is a basic rule in the stock
market to diversify your risk and not do just one type of thing. It is up to you to diversify your
capital or invest all of it in one place. Not that it's a bad thing but you must practice trading
carefully and not making mistakes that can cause you to lose money.
Are the stories of riches true?
Yes. The most famous story is that of Jordan Belfort and it is a true story. It is really possible
for you to make millions out of your penny stock investments but it is important for you to
do the right thing. You have to remain as alert as possible and do your homework. We will
look at the fundamental and technical analysis that you have to carry out in order to assess
the real value of a stock. Once you do, you will see whether it is an under-valued stock. You
must immediately buy it and wait on it to be valued at a higher price.
Should I sign up somewhere?
No. There is no such rule that you must consult a company that provides penny stock advice.
But if you think it is better to consult an expert and understand the penny stock market
through their view then you can sign up with a reliable site that provides advice on Day
Trading Alerts. However, don't sign up with something that looks suspicious and choose a
company that promises to give you all the best picks. And once they do give you their picks,
it is up to you to choose and stick with it or choose something else depending on your
analysis. Different people will view the stock market differently and it is up to you to assess
it in the best possible way.
Will I get regular recommendations?
Yes. You will get recommendations from the company you signed up with on a daily basis.
But if you are going solo, then a reliable news channel will employ experts who will suggest
their picks to you. You can look at the suggestions and choose stocks that you think will do
well in the market. Your broker will also suggest good stocks to you, as they will get certain
tip from the stock market analysts. But don't blindly take whatever they offer to you and do
your own research before taking up a stock. It pays to study the stock for a week or a month
and only then decide on it. Remember that these Day Trading Alerts are pretty predictable
and you can understand the pattern they will follow by observing them for a few days.
Will they give me a stop loss price?
Yes. When somebody gives a suggestion, they will also supplement it with a stop loss
suggestion. Stop loss is an important part of any stock market strategy. If you don't make use
of one, then you will end up getting stuck with a bad stock for a long time. Instead, it is best
to get rid of the stock and not bother about it. Many people think it is best to not use a stop
loss and hold on to the stock. But that will turn into a long-term investment, and your money
will be locked up for a long time. Instead, it is best to sell the stock and take a temporary loss,
which can be easily compensated later. If you wish to, then you can think of a stop loss price
yourself. It is generally thought of based on how much the person is willing to risk. So, you
have to set the stop loss price after determining how low the price might actually fall.
What's the best trade strategy?
That depends on you and varies from person to person. There is no one strategy that is
universal. If you wish to become a contrarian, then so be it. If you wish to be a fundamentalist,
then do your homework first. If you wish to invest in stocks using your knowledge on
technical then you can do that as well. The choice is completely yours and you can pick
whatever you think will work for you. But don't trust someone else’s opinion and their
strategy, as what works for one might not for another. Even if two people start out with the
same capital and the same stocks, one might make wise choices and the other one stupid
choice. So it depends on your trading skills and you must pick a strategy that will work for
you.
Is there a minimum capital required?
No. The capital to invest depends on how much risk capital you are willing to invest in the
stock market. As you know, there is a lot of risk associated with these stocks and you must
choose them wisely. It's better to start with a small capital, and then increase it as you go.
That will ensure you know what you are getting into and whether or not you should
introduce fresh money. Certain stocks will require you to invest a minimum amount, but
given the stocks' low prices, you won't have to spend too much in just one company's
stocks. On the other hand, you have to have enough money at your disposal in order to
diversify your investments. You have to try and invest only 5% of your money in any one of
the stocks. If you invest any more than that then it will not work in your favor. You will
remain worried about your money, as all of it will fall together if it is all in the same place.
So, you have to have a sizeable investment amount ready to be invested in different stocks.
Does it need full time attention?
No. Many working professionals indulge in penny stock trading, as it will pay them well. You
don't have to keep staring at the screen to observe any fluctuations in the prices. You can set
alerts that will tell you whether or not a stock is moving fast enough and you need to take
quick action. You will also have your broker’s assistance; who will observe the trend in the
stocks, for you, and tell you when it is best to buy them or sell them. But if you are very
serious about it, then you must spend time indulging in it and understanding it thoroughly.
You can then start trading regularly, and if you think it is worth quitting your job for then
you can take that option as well. But remember, taking up penny stock trading full time is a
risky thing to do, and you must thoroughly understand all the pros and cons of it before
deciding to go professional with it.
Can I trade daily?
Yes. In fact, penny stock traders are considered day traders. They are meant to buy and sell
on a daily basis and make several small profits from it. So pick the stocks that are volatile
and go down and up within a single day. But you need to be careful and pick the stocks that
are slightly predictable. Choose the ones that drop during the initial hours of trading and
then rise up by the end of the day. That will ensue you get the stocks at the lowest and sell it
at the highest price.
Can I hold and earn?
Yes. You can hold the stock and earn from it. Certain Day Trading Alerts will gain overnight
and you can take advantage of the situation. But you must know what to hold and what to
dispose off to benefit from it. Some stocks might also lose points over night, and it is
important for you to sell such stocks on the same day as you buy them. Is being carried away.
You might get carried away and end up making mistakes. This strategy will work for Day
Trading Alerts but is not advised. You will end up holding on to a stock that might not give
you a big reward at the end. Also, you might accumulate on many Day Trading Alerts that all
belong to the same industry. There is also the risk of not making use of a stop loss
mechanism, which can cause you to lose some of your money. Similarly, you have to be aware
of all the risks and steer clear of them.
These are some of the most common questions that get asked on the topic and hope you had
yours answered.
Getting Started With Day Trading Alerts Trading
When starting out with Day Trading Alerts trading, it will be prudent to start with paper
trading. This is the use of fake money to trade, instead of diving in straight with your hard-
earned money. Just take some time to learn well about penny stock trading even for a month
to get a feel of your skills. Record your results, as this will give you the needed confidence
you require before you can start trading. Once you are sure of your skills you can set up an
online broker account.
For you to start you need to have some tools to get you started in order to trade well in the
penny stock market. The following items are essential to get you started on Day Trading
Alerts trading especially if you want to start trading online:
A reliable computer
A good computer is essential to get you started. If you want to trade online, you would not
want hindrances due to for instance computer failure or inability to the computer to process
your orders in real time. Get a good computer that can serve you for quite some time.
It is best to have a dedicated computer table to place your computer on and not use it for
anything else. Don’t allow others to access it and make sure it is meant only for you to use
and work on. This should extend beyond the working hours of the market and you must not
store any other data on it. You will have to take it very seriously if you wish to make it big in
the stock market. Having a casual attitude about it will not cut it. If you decide to get yourself
a laptop then ensure that it is not moved around. Give it a proper place and ensure that you
reach there on time every day, before the market opens and do your early morning research.
To conduct your research, you will require the following important aspect.
Reliable Internet connection
Since you will be trading online, you need to get fast Internet connection. As earlier indicated
prices can vary very quickly meaning that you need to be on the lookout and if there is a
sudden change in prices make the most suitable decision. Unreliable Internet may disappoint
you especially when you need to make a quick decision. The risk doubles when you conduct
day trading. As you know, the prices vary within split seconds. You will wonder how
something so low could bolt up within a few seconds or how something so high could drop
so soon. If your internet gives you problems then you will end up not making the best use of
a price fluctuation and lose out on good money making opportunities. So it is best to get the
fastest possible Internet connection and have two separate stations to access it.
Brokering company
The next thing to take up is a brokering firm. Pick a good one for yourself. There are many
choices and you can choose the one that offers you the best commission rates. You can ask
someone to suggest to you the best company in their opinion. You can also look up online to
know the best one. Once you decide, personally go down and fill out the forms. You might
have to carry a few personal documents for the registration and can ask them by calling them
up in advance.
Special broker
Once you choose the firm and open your account, you must choose the right broker as well.
There might be penny stock specialists, who might help you get set up and understand the
functioning properly. Ask the firm to suggest the best penny stockbrokers to you and employ
the best one. Remember that you must develop a good rapport with your broker if you wish
to make it big. There should be no discrepancies and the two of you must be on the same
page for it to work out for you.
Trading Software With Real-Time Data
You would also need the best real-time data feed application in order to trade in Day Trading
Alerts. It is crucial that you trade on real-time data, as you would not want to make a decision
on some data that is outdated, as making such a decision can cost you a lot of money.
This software can be downloaded from the Internet. It can also be availed through your app
store. But it will be easiest to get if you ask your brokering company to help you have the
software installed in your computer. In fact, it is best to choose the software that your broker
himself uses so that the two of you can be on the same page. Many types of software also
allow you to buy and sell the stocks by yourself. All you have to do is login and set buy and
sell calls. This will ensure that you don’t waste any time conferring with your broker and buy
and sell the stocks at a fast pace. But before you do so, it is important to understand the
process thoroughly lest you make a mistake while choosing the buy and sell numbers.
Journal
You must maintain a journal. Although you can easily take notes in a digital diary, it is best
to maintain a hard copy of all your notes. Write down any notes that you wish to refer to and
also any references that you wish to remember in the future. Remember that these notes will
come in handy in the future and are important things to consider, which cannot be taken
lightly. Don’t lose the journal though and keep referring back every now and then to know
the best time to buy and sell the stocks.
Now that you have rough idea of what Day Trading Alerts trading is and have all the
necessary items with you, what next. The next step is to start trading. As earlier indicated,
rather than start trading with actually money, you should instead start with paper trading
first. Once you have learnt about Day Trading Alerts trading, then you can start trading with
real money.
Paper Trading
To practice paper trading, it is good to make sure you have all the requirements to start. Once
you have your fast reliable computer and Internet connection, you need to have suitable
software to record your paper trading results. You will have to learn to wake up earlier
before the market opens so that you can do your research before going into a day’s trading.
The penny stock market normally opens at 9.30 EST. Using your software go over it and look
at any relevant news and filings. Pick out the stocks that have released “WOW” press releases
and put them in your watch list for that particular day in case you are using MicrocapFeed.
You can also make another watch list for trends to get so that you can track certain trends.
Now prepare a watch list for yourself. This watch list should contain all the stocks that you
either wish to trade in or are already holding. It has to be comprehensive and include all the
stocks that you are interested in tracking. Once the market opens, you won’t have the time
to add a stock at a time. You must be prepared in advance and ready with your watch list
before the opening bell goes off. But wait for the rates to settle down a little and don’t get
over excited by the fluctuations in the numbers that happen.
In your watch list, make sure the supply side of the stocks you are watching are getting to
minimum and if the opposite is the case, then you need to pull out any such stock from your
watch list. Also make sure no S-8 for any stocks you are watching were filed recently to the
stock exchange commission as this will be an indication of old news or small news. Also,
check earlier Press Releases of that company to make sure there is no news overdose on the
stocks you could be watching on your watch list. The simple essence of doing this is to make
sure you have filtered well the stocks you will be following up eliminating the less attractive
ones.
When the opening bell goes, watch the stocks on your watch list to see if your prediction
reflects the actual traffic of demand on them. The volume has to be high and ensure that
people are also buying.
Another important thing to note is that the number of people buying is greater than the
number of people selling. That should be a good indication of prices going up. The bid should
be tight; a large gap is a reason to move away. This is where many people go wrong. Don’t
assume your stock will keep rising up if there are very little sellers and too many buyers. The
ones who think they will not get the stocks owing to less number of buyers will decide to pull
out of it. This means that the number of buyers will drastically reduce and the sellers will
meet their ideal buyers. There is also the danger of over buying, which will cause the stock’s
price to plummet.
Decide on how many shares you will buy and at the price, you are willing to buy them. Take
your amount of funds you are trading with for that day, in our case it is $1000 dollars and
divide it by the asking price; it’s that simple. This should give you the number of shares for
the day that you want to buy.
Using your earlier set percentage gain limit, wait until your limit has been attained and sell
your shares at that profit; don’t be greedy. Instead, just take it and count yourself lucky as a
little patience might send you on the regretting end. Go ahead and put down your outcomes
on your paper-trading portfolio. Repeat the paper trading for a few more days; it can even
be for a month to see how well you are doing after which you can now go in full swing with
real money.
All said and done, many people will struggle to settle for the price that they wish to sell it at
and think it will keep rising and wait on it. But you have to have a strong determination to
do the right thing and not think about the price going higher. If it reaches your price then exit
immediately. Besides, a few extra points won’t give you a sky rocketing amount.
Below is a summarized systematical baby steps to have you get into full action as you now
decide to involve your real funds in the Day Trading Alerts:
First, remember to meet the requirements including the legal requirements. Go
through the instructions manual and ensure that you have understood everything
there is about penny stock trading.
You need to sign up with an online broker and fund that account with cash. It can
be E-trade, Scot trade, or even Fidelity.
Use the steps used in paper trading and do everything except this time round you
will involve real money
Set Investment amount
You will need to have a figure of how much money you are ready to put into the investment
of penny stock trading. Simply have your figure right. It could be $ 1ooo or $700; you will use
this amount to buy shares worth your amount of capital. Remember that this is your initial
investment and you might need more as you go. So think of splitting this amount and
investing $700 for now and holding on to the $300 to pump in once the $700 has been fully
invested.
*Get down to simple math
You will need to multiply your initial amount by 3. Why? In order to trade every day, you will
have to multiply your initial amount by three and wire it to your online account. For instance
if you had set $ 1000 for a single stock, then you will require $ 3000. It all depends on your
initial figure that you have set.
How it works
Assuming you bought $1000 worth of shares on Monday, and then you decide to sell it when
the stock goes up by say 10% this will imply that you have made $100 profit plus
commissions. Profit will be 10 % of $1000 and then add the given commissions say $20. In
essence, you would have made $120 on Monday on top of your investment. Now see why you
had to multiply your initial amount by three. It is because you will have to repeat the process
on Tuesday and Wednesday. Here, the company will not pay you the money immediately.
They will obviously have to free your money and return it back to you. That is why you have
to understand your limit. So the processing will take some time and you have to continue
trading in the meantime. By Thursday, the money you used will be ready for use on Friday.
This is because there is usually a three-day settling period when you buy or sell a stock
before the cash can be ready for use again. This is very important to eliminate incurring
opportunity cost which is the cost foregone when you leave your funds idle.
How to buy Day Trading Alerts at lowest price
The Ask is the real-time lowest price someone can be willing to sell the sock for while the Bid
price on the other hand is the real time highest price another person is willing to buy a stock
for. Once you get to understand those two, you may have to place your bid at 10% or more
above the current ASK price. This normally is applicable in highly competitive trades when
demand surpasses the supply. Set your entry point with your bid price at an initial of 10%
instead of placing a bid on an order that will require more modifications. It is best
recommended not to place an order on an (AON) all-or-non-simply because it will allow your
broker to fill your order when all the shares at your specified price become available. It is
best to have at least some shares instead of none.
Avoid chasing Day Trading Alerts that are in excess of 50% when there is a buying rush. This
is simply because you will be trying to buy a stock that is suddenly going up. It is best to buy
a stock after the first 20 to 30 minutes of the trade opening. From past experience, rapidly
growing stocks take a sudden shift back to low before the share price shifts up again.
If you are a serious penny stock trader then you will have to take the above-mentioned advice
very seriously. It is vital that you understand how a stock should be bought at its lowest price.
Even if you are a beginner, don’t jump into it to get hands on experience. The stock market
is not a very forgiving place and won’t allow you to get away with a lucky streak. You must
spend some time understanding all that there is to, about the particular Day Trading Alerts
that you have chosen to trade with. Then you must observe the market trends and spend
some time in front of the computer. Once you have surmised the trend of the stock, you must
place a buy bid for it at the correct ask price. And even if it goes down by a little after that,
you must not worry but if you do it the right way, then it will not go down at all.
How to sell Day Trading Alerts at high prices
It is best to exit your position when the stock price is going up. When the prices go up,
normally it is because buyers are thronging in to buy. If you wait for the prices to go down
you will get in contact with other shareholders who might want to exit due to current
decreasing share price. This means the best sell you might make is the bid price, which is not
the price for a seller. The trick is buying early and selling early.
But this early is not too early. You must wait until such time as the market is fully operational.
If you remain in a hurry to buy and sell then you won’t get anything. Understand to time the
market the correct way. As rookies, you might end up doing the wrong thing at the very first
go but it will prove to be a very good learning curve that will educate you on the importance
of doing the right things.
The best time of exiting your position is within the first ten minutes as this is the time when
the buying interest is highest. It is best advised to take advantage of this time as many
companies releases Press Releases during late hours when most investors are not available
and the following day they create a commotion on the first few minutes on the socks.
Most Day Trading Alerts rushes happen between two to five days so try to exit your position
within this time. The faster you secure your profits the better. Do not be caught holding the
bag. Hit and run is the best strategy to make sure you stay on top in this trade.
These are the main aspects that you must consider for your penny stock trading and are
sufficient for you to start your trading at the earliest. However, you must conduct further
research on the topic if you wish to make the most of your penny stock trading.
When it comes to the stock market, there are many types of traders that partake in the
activity of buying and selling stocks. It is important that you understand all the techniques
and then decide on the one that you will choose for yourself.

Contrarian trading
Contrarian trading is the first concept that we will look at. This concept has existed for quite
some time now and was popularized by Warren Buffet. The concept is extremely unique and
will amuse you.
As the word suggests, a contrarian will do the contrary of what he or she should be doing. So,
they will not follow the crowd and go the opposite way. They will not stock to the normal
rules that most investors follow and have their own rules.
So if the market is bad and crashing, the majority will panic and start selling their stocks. But
a contrarian will only start buying it. So that means the contrarian is not bothered about the
fall in prices and is definitely not panicking. He is taking advantage of the opportunity and
buying more of the stocks to accumulate it.
On the other hand, when the prices of the stocks are rising rapidly, the general stock trading
public will decide to buy the stocks. But the contrarian will be keen on getting rid of all the
stocks in his possession. So, the contrarian will always go against the general opinion of the
crowd and do their own thing.
Pros of contrarian trading
The main pro of this type of investing is that, it provides the investor with an opportunity to
capitalize on the market’s volatility and benefit from it. The contrarian will have the chance
to buy the stocks at a low price and the sell it at a good price, even if it is not the best price,
it will still be a good deal. As you know, being greedy is not the right way to go about in the
stock market and you must settle for whatever best you get.
The second pro of this situation is that, you have the chance to balance out the market. So
when everybody is panicking and selling, you are buying it and balancing it out. If there are
only sellers and no buyers then that will spell trouble. So, you can put an end to the
pandemonium by becoming a contrarian and doing right by the market.
Cons of contrarian trading
As you know, contrarian trading comes with its own set of cons as well. These cons are what
make the concept real.
The first con is that, the crowds might be giving up on a stock because of some formation that
has leaked. Maybe the company is bad and not doing well, that might cause its stocks to lose
value. During such times, you must be careful and analyze the stocks carefully before
deciding to buy it.
Another disadvantage of this type of investment is that, you might have to hold on to a stock
for some time before it goes up. You must know exactly when to dispose off a stock for your
advantage.
As you can see, there are both pros and cons for this type of trading and it is up to you to
choose or leave it.

Fundamentals trading
The next type of trading is known as fundamentals trading. As you know, when a company
decides to go public with its shares, it will have to declare all of its financial details. It is this
details that will help people choose the right stocks for themselves. It is possible for you to
check the details of a company's financials at any point in time. All you have to do is go online
and check for the details there. So the basic idea behind using the fundamental analysis is to
understand the overall health of the company. You are performing the analysis to understand
how the company is faring.
When you decide to check a company's financial statements, here is what you will have to
look for in it.
The balance sheet
The balance sheet of a company as you know, will tell you all the debts that the company has
and also mentions its assets. It is always best to choose a company that has several assets
and only a few debts. A debt free company is always the best choice but it will be very difficult
to find a company like that.
Income statement
The next thing to check is the company’s income statement. The income statement consists
of the operating and non-operating items section. The operating items section is directly
related to the business that the company undertakes. It mentions clearly the expenses and
incomes accrued after producing and selling the company’s main products. The non-
operating incomes on the other hand are those that are not directly associated with the
company’s products. So say for example the company decided to sell some of its assets and
earned an income that will make for its non-operating income. You have to check for both
when you observe the income statement of a company.
Cash flow statement
The next documents to look at are known as the cash flow statement. The cash flow
statement tells you how much money is coming in and going out from the business. So you
will have a clear picture of how much money is actually being circulated in the business. The
cash flow statement is to be analyzed carefully to ensure that the company is able to attain
consistent incomes. You have to look at the liquid assets and judge for yourself whether the
company is a good place to invest in.
Apart from this, here are things that you must check in the company’s balance sheet.
The earnings growth ratio is of great importance. Look for a particular pattern to see if you
can easily predict how the stock’s value will rise in the future.
Look at the price to earnings ratio next. The price to earnings ratio is important to calculate
and you must calculate it based on the current price of the share and then divide it by the
total earnings that the earnings per share. If a stock is valued at $100 and the earnings per
share is $3, then the PE ratio is 33%. Here, the stock is said to be very good as the PE ratio is
on the higher side. So if the PE ratio remains high then it means the stock is really good.
Next, look at the dividends that the company has been paying. Dividends play a big role when
it comes to deciding whether or not a company is worth investing in. If they have been paying
a consistent rate of dividend, then they are a great company to invest in.
Finally, to complete your fundamental analysis, you must check whether the company is
being managed well enough. The board members run most companies and you must check
whether they are operating peacefully, or there are internal problems. Stay away from the
companies that have their members all fighting with each other.
As you know, fundamentals trading refer to the process of looking at the company’s health.
It deals with looking at how the company is faring and what assets and liabilities it holds. It
is to look at the future prospects of the company and understand whether or not it is a good
place to invest in. it is obvious that all of this will have to be carried out in a predetermined
fashion in order to make it a simple task.
The right way to go about it is by reading the annual and financial reports of the company.
That will give you a fair idea of what the company’s health in general looks like.
There are a few basic motives behind using this technique to understand whether a stock is
doing well or not. The first intention is to know if the stock market has gotten the pricing of
a stock wrong. Sometimes, it will list the price of a stock wrongly. It might not understand
the company’s true worth and people will settle for a low price. So, you will have to look for
an undervalued stock and invest in it and wait until such time as the market lists it at its real
value.
So you have to look at its intrinsic or true value and compare it with its market value to see
whether they match. If they match then it means that the stock is listed at its real value but
if the former is higher than the later then it means that it is undervalued and is a good
investment opportunity.
Once you acquire the company’s reports, you have to look at a few fundamental things in it,
which are as follows. These are to be considered in addition to the previous mentioned
reports.

Earnings
Earnings refer to the income of the company. It is obvious that the company will have some
incoming money. This money will be generated due to the company’s functioning. You have
to look at the inflow of money and see how much they are making. You want the correct value
here and must be sure of the amount that is earned quarterly. You have to calculate the
earnings per share and see if the value of the company is good. The earnings per share should
always be on a higher side.
Profits
The next thing to check is the profits of the company. You have to see if there are any debts
and the assets that they possess. You have to subtract the two and the remaining value is the
profit or the loss. It is a debt free company then there will be no problem. The company will
be quite a good choice to invest in. you have to calculate the net profit which can be arrived
at by using the formula net profit/ revenue earned. If you get a large margin of profit then it
means that the company is being operated optimally and they are well aware of utilizing
their budget. Such a company makes for a good investment choice.
Return on equity
Return on equity is believed to be the most important thing to account for in a company’s
reports. You have to calculate it and understand what the company’s true value is. Return on
equity does not take into consideration the per share value, which makes it a great tool to
use and understand the company’s true worth. The return on investment can be calculated
by dividing net income by shareholders equity. That will give you the return on equity, which
will tell you whether or not the company is a good choice.
PE ratio
The PE ratio is better known as the price to earnings ratio. This is to determine whether the
share is listed at a good price in the market. It can be calculated by dividing the market value
of the share by earnings per share. That will give you an idea of what the price to earnings
ratio is. The PE ratio will help you determine the value of the company in terms of its growth
and help you understand whether it really is a good company to invest with.
Price to book value
The price to book value refers to the actual value of the stock as compared to its book value.
It can be calculated by dividing the current share price with the book value for share. That
will give you a good idea of the price to book value. The ratio will tell you if you are over
paying for the stock and if you need to pay lesser for it.
These form the different things that you must look at and arrive at an appropriate value that
you can attach to the company. This value is what you have to use to know the company’s
worth. You then compare it with the market value and see if the stock has been valued at its
true worth. Sometimes, you will stumble across over valued stocks. These can be risky to
invest in as any time their prices may fall and your investment will be in danger. So stick to
the under valued stocks and hold on to them until the time is right to dispose them off.
You can take the help of a friend to conduct this kind of trading if it is too much to do it alone.
Your broker too can help out with the process.
Pros of fundamental trading
As you know, just like contrarian trading, fundamental trading also has its own pros and
cons.
The first pro of this technique is that, it is easy for you to know how the company is operating
internally. All you have to do is login to the company’s website and look at their balance sheet
and income statements. It will not take you a long time to do so and once you understand
how to read these, you can finish doing so in express time.
The next advantage of this technique is that, you will know which stock will actually move
slowly. As you know, those interested in long-term investments will decide to invest in a
fundamentally sound company. So you can stay away from it and not trade in their Day
Trading Alerts if you wish to find fast moving stocks. So this is a reverse pro and will help
you save from investing in a slow moving stock.
Cons of fundamental trading
Fundamental trading is a good choice no doubt, but as was mentioned before, you must
consider it only if you are interested in holding on to the stocks for a long time. Don’t get into
it if you wish to hold the stocks only for a short duration. However, don’t write it off
completely and ensure that you choose stocks that are fundamentally sound.
The next con is that, it will be slightly time consuming for you to go through all the individual
details mentioned in the financial statements. Even if you are adept at it, it might take you
around half a day or more to go through all the details of the company.
Also, your fundamental analysis will not consider the herd mentality. So you cannot be a
contrarian and a fundamentalist at the same time. You won’t know whether people are
actually buying these stocks or you will end up being one of the few that have invested in the
company.
Technical trading
The next type of analysis is known as technical trading. This is very different from
fundamental trading. Here, you are not concerned about what is going on internally and are
only bothered to look at the trend that the company’s stock has been following.
This trend refers to whether the stock has been rising or falling. So you are basically studying
the pattern that the stock is adopting. This you can do by looking at whether the stock’s price
has remained consistent or there have been sharp differences.
Then you will place it on a graph and check for a pattern. The pattern will tell you where the
stock is headed next and whether it will rise up or fall down. You must understand whether
or not the stock is predictable and you will be able to tell for sure if it is a good investment
or a bad one.
Apart from you yourself checking the pattern, you must also make use of a computer to chart
out an algorithm. That will provide you with further details about the stock’s price volatility.
The basic idea is to understand the demand and supply of the stock. As you know, the higher
the demand, the higher the price of the stock and the lower the demand, the lower the price
of the stock, so you must check whether the price of the overall demand for the stock is high
or low.
When you look for the movement in the volumes, make sure that you know how to interpret
it correctly. You will be able to get a comprehensive graph that showcases the price trends
clearly. Study this graph and understand everything that there is to about the price
fluctuations and whether or not the company is a good investment choice for you.
It is understandable that you will find it a little difficult in the beginning to understand the
technical of a company at the very begging, but with time and through regular practice, you
will know exactly how a company’s stock operates.
There is also certain online software that you can make use of and understand the technical
of a company. In fact, it will allow you to compare two or more technical and give you a
comprehensive analysis for you to pick between the two stocks.
As you know technical trading refers to looking at the patterns that the stock has established
in the past. That will give you an idea of how the stock is faring in the market.
You have to look at the 5 years, 1 year, 6 months and 1 month graph to know the price trends
of the company’s stock. This you can do by going through their reports. They would have also
published it on their website, which your trading company would have included in the
company’s portfolio. You can have a basic idea of what the stock’s prices have been like in
the past just by looking at their graph.
There are three main components that you must look for in a technical analysis and they are
as follows.
Direction
The first thing to notice in the graph is the direction of the stock’s prices. It is obvious that
the price has just two ways to go which is an upward trend or a downward trend. In some
cases it will remain steady at the same price but not for too long. If it is on an upward trend
then it means that the stock is on a bullish run. If it is on a downward trend then the stock is
on a bearish run. It is important for you to capitalize on the bullish run and sell it at the
highest price and if it is on a bearish run then remain close to your buying price to dispose
off your stocks. There are two bar reversals that you must understand and they are as
follows.
Speed
The next thing to look at is the speed at which the prices are moving. For this, again, you have
to look at the price graph of the company. The best way to look at the speed is by making use
of motive wave and the corrective wave. The motive wave is classified as 1,2,3,4 and 5 and
the corrective wave is classified as A, B and C.
The correct way to look at the trend is by looking at these waves individually. If in a graph,
the wave 1 and wave 4 are overlapping then it means that it is a corrective wave. This means
that the stock is headed for a correction and so; some of the price from wave 1 will be
repeated in wave 4.
If the two are not overlapping then it is a motive wave. The third wave is generally seen as
the fastest moving wave. It is vital that you identify the waves correctly in order to remain in
profit. If you misread them then you will end up losing a lot of money in the stock market.
Distance
The last measure is the distance. This too should be observed in the graph. The distance is
measured by making use of a chart. You have to use geometric shapes like the triangle to
determine the highs and lows of the stock prices. It is important that you identify this trend
by looking at the different shapes that the triangle takes. The first trend is when the triangle
expands and creates a higher high and a lower low. Another pattern is when it makes a lower
high and a higher low. You have to understand what each of these signifies and use it to
understand the trend of the prices better. Again, it is important to understand the trend
correctly. If you get it wrong then you will end up losing money in the market.
All this will seem a little daunting at the beginning but will get better with time. You will see
that it is easy for you to carry out these calculations and arrive at conclusive results. If math
is not your forte then you can get a friend to help you out. There is also some software that
is available, which will do the calculations for you.
Pros of technical trading
The very first pro of this technique is that, it helps you establish a proper trend that the stock
will follow. The basic assumption of this technique is that, the stock will follow on a pre-
established trend. It will rise up and fall down the same way as it has in the past. So say for
example an apple stock rises mid month and falls at the end of the month. You have to know
to buy it during the month end and then sell it mid month. Similarly, you have to establish
the pattern for all your stocks and predict its rise and fall.
The next advantage of this technique is that, you don’t have to spend too much time going
through the details of the company. Unlike the fundamentals technique, you only have to
establish a pattern that the stock will follow and then predict its highs and lows. Remember
that you have to understand how to interpret the graph correctly and tell for sure how the
stock price will move.
Cons of technical trading
Just like the pros, there are also certain cons that this technique brings with it.
The first con of this technique is that, it relies heavily on the trends alone and does not
consider the company’s fundamental state. So chances are, you will end up investing in a
poorly managed company that is doing bad internally. That will cause you to hold on to a
stock that is pretty much useless after news of it breaks.
The second con of this technique is that, the graphs will not always put out the correct trends.
It will be impossible for you to predict the mentality of millions of investors and so, you will
not know whether or not the stock will follow the pre determined trend. So relying heavily
on trends is the wrong choice to make.
These form the different techniques that you can use to trade in the market. You must
understand the pros and cons of each and only then can you choose the right one.
Myths about Day Trading Alerts
It is obvious that there will be many myths surrounding a topic. It is the same case with Day
Trading Alerts. There are many myths that surround it and it is important for you to
understand them and separate the facts in order to invest in them. We will look at the
different myths in this chapter and help you understand the topic better.
It is not easy to buy and sell these stocks
There is widespread misconception that it is difficult to buy and sell these Day Trading Alerts.
It is believed that you need to be an avid investor or quite well established in order to trade
in these stocks. But this is only a misconception. It is known that Day Trading Alerts are a bit
elusive but that does not make them a hard sell. If you know how to trade in them and are
well versed with the concept of paper trading then it will be a cakewalk for you. You will only
be required to understand the functioning of these Day Trading Alerts and will be good to
go.
Big companies were once penny
There is a general belief that big companies like Microsoft were once Day Trading Alerts are
now billion dollar companies. That is not true. Not every company goes from being a penny
stock to a regular stock. If the company is big then they will be listed with a big per share
value. Day Trading Alerts are generally for small companies that don’t have a big market cap.
But that does not mean they cannot be traded in large volumes. There is no such limit of the
number of buyers and sellers that can trade with it in a single day. If the stock has gained
popularity then many investors will be willing to invest in it regardless of whether it is a
small or a micro company.
Day Trading Alerts are frauds
Many new investors will think that these stocks are only fraudulent. They will think so based
on the low price of these stocks and how slow some of them move. In fact, many times, the
volumes of these stocks will be so low that suspicion will be bound to arise. But, it is baseless
to think that way. The stock market encourages all types of stocks. Right from those that are
listed at $100 a piece to those that are listed below $5. It does not really matter how small or
big the company is. Not saying there might not be any frauds but their presence will be very
small in the market.
Prices won’t dip further
Don’t make the mistake of thinking that prices of these stocks will not dip in the future. There
is no lower limit on some stocks. It might keep dipping and then get delisted. So don’t think
that the price of a stock will not fall any further. If you are confident that despite a dip it is
still a good company to invest in then you should go ahead with it. But if you are not confident
in the stock then it is best to steer clear off of it.
Prices surely rise up
No. There is no guarantee that the prices that have dipped will surely rise up. It depends on
the demand and supply of the stocks and how many are traded in the market. There is no
point in waiting on a stock for too long. If the price has not risen then you must dispose it off
at the earliest.
Day Trading Alerts are safe bets
Many people believe that it is a safe option to invest in Day Trading Alerts. However, there
are certain risks involved with Day Trading Alerts. You have to understand these risks and
only then invest in these stocks. To be honest, there is no investment option in this world
that is free of risk. So it is a little unfair to assume that Day Trading Alerts will be safe bets.
You have to identify the stocks that are good investments and stick with them. This will be
possible after a while and once you have studied the market for a few months/ years.
You need to be an insider
There is misconception that you have to be an insider of the company to buy or know about
the stocks. But that is not true. You can be an outsider and still know about the best stocks
to invest in. If it is a little tough to buy the stocks owing to higher buyer and lower seller
volumes then you have to look for the best opportunity when you can enter with the stock.
Again, experience will help you out and let you know when the best time to invest in the
market is.
It is best to invest in unknowns
Do not make the mistake of investing in unknown companies thinking that it will be a good
bet. Nothing is guaranteed in the stock market and it will not be a good idea to invest in a
company that is up and coming. What if it turns out to be a bad company or one that is a slow
mover? You don’t want to remain invested with such a company. So, the best thing is to invest
in something that is doing well or has a good track record.
I’m better off without them
No. This is a myth that you should fight away. If you think it is not a good idea to include Day
Trading Alerts in your portfolio then you are wrong. Day Trading Alerts might be low priced
stocks but they will help in diversifying your portfolio. In fact, they are capable of giving you
bigger and better profits as compared to your regular stocks. So don’t make the mistake of
thinking of them as being any less worthy. They are quite worthy and will help you expand
your profit margins.
These are the different myths on the topic and it is important for you to understand these
thoroughly if you wish to make it big in the world of Day Trading Alerts. You can go through
these again if you think you need to understand the topic a little better.
How Day Trading Alerts Prices Vary
As we saw in the previous chapter, there are stocks that are priced really low and traded on
a regular basis in the stock market. These stocks are mostly influenced by several internal
and external factors that cause its value to rise up and drop down on a daily basis. Day
Trading Alerts are slightly more predictable as their market is much different from regular
stock markets. So it is easier for you to trade in Day Trading Alerts as compared to normal
stocks. However, it is important to understand the various factors that influence Day Trading
Alerts and how their prices vary.
The prices of Day Trading Alerts are usually influenced by their demand and supply as well
as the specific assets or earnings of the particular company. This means that where there is
a high demand and the supply is low, the prices will increase. This is usually the best time to
sell the stocks and earn your huge margins. Since we rely on demand and supply to make
profits from trading in Day Trading Alerts, you may not necessary evaluate the market but
rather what could increase or decrease the prices so that you can know the best time to buy
and the best time to sell.
Similarly, have an eye out on the news, as there will be stories available about the particular
company. These stories will tell you whether or not the stock of a company will do well.
Generally, any changes in the company’s board members or an announcement of their profits
will cause the price of the share to surge. Similarly, if there is a loss reported, then the price
will plummet. You have to understand this trend and establish a pattern where you first
check the news and then decide on a stock to buy, or stay away from. Let us look at it in detail.

The Fourth Estate And Day Trading Alerts

Typically, the media plays a key role in providing a catalyst in the price shift of Day Trading
Alerts. Negative news of a certain company may cause their stocks to go down while positive
news may make them go up. This is not always the case so a closer look and analysis is
required before making your prediction. The trick is to determine whether the news is good
enough to increase the price of instructions.
You can subscribe to a news journal that sends you alerts every now and then. Reading
regularly is extremely important. There is no point in reading today and forgetting about it
tomorrow. You must pay keen attention to the companies that issue Day Trading Alerts.
Ensure that you know how to interpret the news. There can be several interpretations of the
same news and you must understand it correctly, otherwise, you won’t make the right choice
for yourself. You must also personally go through the company’s balance sheet if you want
to understand it from the different points of view.
You can also watch the news and look at all the updates. They will provide you with all the
best picks and help you understand which stock is a better choice for you.
Below are some sections of news to look out for as a beginner or potential investor in Day
Trading Alerts to help you out

Insider Buying
If employees of a given company begin to buy shares of their own company, it is a sign that
something good is coming up and so it is good to invest in shares of that company.

Reverse Mergers
This is just money in the bank. Some companies in the penny stock market are there to serve
no major purpose except to function as a way for private companies to go public. This results
in transfer of ownership from private individuals to the public. The private company
normally has assets generates revenue but with a reverse merger, a former non-functional
company suddenly acquires new assets and revenues. This is reflected by the price of stocks.

Survival From Bankruptcy

When a company announces it could be going bankrupt, their stock prices go down suddenly.
Later, the company might announce that it has made a detailed plan of escaping bankruptcy
and this might cause the prices of its sock to go up. This is a good chance for an investor to
buy the stocks when the prices are at an all time low and then gain in value when they go up
again. Some companies though can use this technique to influence the prices of their stocks.

New Patent
A right to a new patent by a penny stock company is good news in that, it shows that in future
there will be high revenue numbers.

Affiliation With A Big Company

Many people will want to be associated with big shots. If a re-known company is planning to
do business with a penny stock company, then that is a clear indication of the future potential
growth of that company. Big companies choose their business partners carefully. That means
it is advisable to invest in that company.

Quarterly Financial Numbers

Great quarterly numbers bring about a sudden increase of prices to reflect the current
quarterly numbers of the company. This can be due to various causes such as an increase in
the number of contracts, royalty fees, and higher demand for products or services.

Positive Signs to Look for

As you know, prediction is everything when it comes to penny stock buying. You need to
understand whether or not the price of the stock will rise soon or if it will drop down. More
than the latter, it is the former that you need to consider carefully if you wish to make the
most of your Day Trading Alerts.
Here are some signs that will tell you if your Day Trading Alerts are on the verge of rising up.
Money movement
The very first thing to look at is whether or not any money is moving into or out of the share.
This will have a big impact on the price fluctuations of the share. If the company has
introduced newer shares or split the old ones then that is also of relative significance. You
can check the movement of money using the technical analysis and see whether any fresh
money has been pumped into the shares. Check the on balance volume and see if it is on the
upper side. If it is, then the price of the share will start to move upwards any time and you
must be prepared to buy the stocks, as its share value will surge up. On the contrary, if the
on balance volume is low, then the price per share will plummet. So that is indication for you
to get rid of the stock as soon as possible lest you be stuck with stocks that will not fare well
in the near future.

Trading volumes
The next thing to look for in a stock is the trading volume. You must look at the number of
stocks being bought and sold. If there is a surge in the number of buyers then rest assured,
the price of the stock will rise. You must also look at the ratio between the buyers and the
sellers to have a clear idea of where the price of the stock will head. If there are many buyers
and few sellers then the stock price will surely rise. But if there are lesser buyers and many
sellers then the stock prices will go down. If there is a sudden movement in the volumes then
you must prepare to take appropriate action. Here, there must be a double spike in the
trading volumes, which will tell you whether or not it is important to note the change.

Precedence
Looking at past records is the best way to tell whether the price of a stock will rise. So look
at what the company’s management did in the past to understand whether your stock’s price
will raise or fall. The company’s CEO and top management members make this decision. By
checking the past records, you can see if the company has taken any action on the shares and
its values. Many companies will decide to split the share and announce bonus shares, this
will cause people to buy more, as the company’s shares will half and turn affordable. It will
subsequently cause a spike in the share’s price. This is a great opportunity for you to
capitalize upon and buy the shares and then sell it again when its prices have high.

News
Any company that manages to remain in the news for a long time is sure to benefit in the
stock market. It is a lot like advertising. When you watch an advertisement, you will feel like
buying the product. Similarly, you will feel like buying stocks of a company whose good news
is doing the rounds. The news can be in regard to its fundamentals or its technical or
something to do with its products. All of this will cause it to remain in the news and you can
benefit from it. Just make sure you tune into the news and also hear about companies from
your social circles. If there is good news then the price will definitely rise up in the near
future and if there is bad news, then the price will fall for sure.
Market capture
When a company increases its market share, it is clear indication that its products are doing
well in the market. You will definitely benefit from the company’s stocks and must buy them
at the earliest. It will also mean an increased pressure on the competitors and that will cause
their shares to be affected as well. So you must check whether you have shares of their
company and decide whether to hold or sell them before it gets affected further.

Results
As soon as a company announces results, there will surely be a change in its share price. If
the results are good then obviously there will be a rise in the price and if the results are bad
then there will be a drop in the price per share. You must be aware of when the results of the
company will be announced and whether it is best for you to buy, hold or sell the stock.

Small vs big
You must understand that a large company’s small shares are always better than a small
company’s large shares. So, look for a multi million companies whose shares are quite less in
the market as opposed to a small company whose shares are more. Although contrarians will
pick the latter, it is up to you to choose the type that will fit your investment need the best.
With the former, it will be easier to predict the impact of market trends as opposed to the
latter. So you will have something that is easy to foretell and not be stuck with shares that
are not following any trend.

High low patterns

There is general belief in the stock market that a stock that has been dipping will continue to
dip and a stock on the rise will continue to raise. However, the contrarian belief says a stock
on the rise will dip and a dipping stock will rise. Both of these are valid views but you must
look for the highest highs and the highest lows in a stock. If a stock ends up dipping below
its 1 year low then the stock is in trouble, and not going to move upwards any time soon.
Similarly, if the stock has hit a high much higher than its 1 year high then it is a great stock
to invest in and it is best that you choose that stock for yourself.
How To Minimize Risk
As we have seen earlier on, trading in Day Trading Alerts can be quite risky especially since
there is not much information about penny stock trading and your best shot is what is
announced in the media. This means that you need to find all means possible to reduce your
risks as much as possible. In order to minimize risk, you would need to know some common
traps that many Day Trading Alerts investors have found themselves in.
Message Boards
These are literally stock cons that influence buyers and sellers to trade in the stocks while
pretending to assist you with a piece of advice only to realize you have been cheated. They
include pumpers and bashers. Pumpers will dupe you to buy stocks by posting “evidence” to
drive prices up. When they realize that they have convinced enough people to buy stocks
creating a false demand, they sell their shares and leave you stranded with your shares.
Bashers on the other hand will convince you to sell the stock you bought by trying to make
you think the stock is not good but in real, they are duping you. It is important to be sharp as
most of these trades are a mind game. These message boards will be available in most
websites that speak about stocks and those that give you details on a daily basis. There will
be two or three people who will ask you to invest in a certain stock and will give you some
favorable details. You might actually experience a little success initially but your luck will
run out in no time and you will have to start from scratch. So you must stay as away from it
as possible and ensure that you only trust reliable sources for your stock picks.
Stock Promoting E-Mails And Faxes
Some self-proclaimed gurus may send you emails or a fax to inform you that the stock prices
will rise or fall. I would advice that you don’t act on such information but rather do your
research to make a decision. These will look like they have come from reliable places but
upon investigation, you will realize that they are actually dupes that are using fake identities
to get people to invest in a penny stock and increase its stock price. You should know better
than that to not indulge in believing such emails and faxes, as it will only spell trouble for
you.
Group Runs
These are very tricky in that they consist of an organized group of traders who come together
and start buying a low volume stock. This in turn attracts attention and people turn try to
buy them. When prices shoot up because of the demand, these groups sell their shares at
high prices and leave the last person to buy at the highest price demand of the day counting
his or her loss when the demand suddenly shifts back to its low. An advice here is that you
can invest in this stock but you need to be fast; make hay while the sun shines by selling
when the prices are still high. You must know clearly whether you are a day trader or will
hold on to the stocks for long. If you are the former then get rid of your stocks the same day
and if you are the latter, then hold on to it for at least 2 days.
Average News
Nobody wants to be average. Average news does not make a kill in the penny stock market.
They always lead to average returns. Therefore, for you to be influenced by some news to
invest in some penny stock, make sure the news are good enough to make a hit. Don’t settle
for it even if it is a great company. Your money is of value to you and you must tread carefully
in the stock market.
Too Much News
Companies that give too many press releases that are intended to influence the prices of Day
Trading Alerts should be approached with a lot of caution. As a beginner, you should do
research on recent press releases of that company and see whether they are just trying to
make value of their stocks in order to influence prices to go up. Experienced traders will not
invest in such companies and so should you.
S-8 Filing
This is when a company files a document to the Stock Exchange Commission telling them
that they have increased the number of shares in stock. The key factor is to check on demand
and supply. Now that the supply is high, it is prudent to stay away from such investments.
Dos and Don'ts of Day Trading Alerts
In this chapter, we will look at the different dos and don'ts of Day Trading Alerts that you
must understand in order to make the most of your investments.
Dos
These are the different dos that will help you make a smart investment.
Do make use of risk capital
Risk capital refers to money that you should be willing to risk. The money that you think will
go bad is what you should be willing to invest in Day Trading Alerts. But don’t worry chances
of it going bad are quite low. But being prepared for it will help you in a big way. It will allow
you to make calculated moves. Here, it is important for you to make use of the money that
belongs to you and not anybody else. It should be your personal risk capital that should be
invested in Day Trading Alerts.
Do your research
It is extremely important for you to do your research. Suppose you looked at a message board
and came to know of a certain stock. You have to do your personal research on the stock
instead of blindly trusting what you read there. Maybe there is misleading information there
meant to throw you off. So, it is important for you to conduct a research on the topic first in
order to know whether they are giving you the correct information. You will read about the
fundamental and technical analysis that you must perform on a stock in order to understand
whether or not it is really a good investment.
Do sell fast
It is extremely important for you to sell your Day Trading Alerts fast enough. Usually, they
are sold on the same day that they are bought on. That gives you the chance to avail a profit
instantly. The lesser time that it takes for you to realize a profit, the more that your
confidence in the investment grows. So, it is important for you to be quick about it. It will
seem a bit daunting at the very beginning but with time, you will get better with it and it will
get easier for you to buy and sell stocks.
Do look for high volumes
It is extremely important for you to look for high volume trades. The numbers should be right
up there in the 100,000s. Such stocks are sure to leave you with a profit. You have to look for
high volumes at about 1.30 in the afternoon as that is when most of the lucrative trades take
place. If you spot a stock that is doing well at that point in time then you can take a call on
the stock. If it is going at a good price then sell it, if it has dropped to a good price then buy
it.
Do cut loses
It is extremely important for you to cut down on your losses. These loses will come about as
a result of you selling short. You have to try and remain as positive as possible about a new
investment and know for sure that it will help you cut down on your losses. Make smart
investments and stay away from those that will end badly.
Don’ts
These are the different don'ts that you need to know of when you invest in Day Trading
Alerts.
Don’t get attached
It is important to not get too attached to the stocks. Don’t get emotionally attached to the
companies and wish to invest in it only because you like it. You will end up making a mistake
and generate a loss for yourself. That is not what you want with your investments. If the
company is good then don’t invest in it only when the stocks are going to pay you well. Don’t
think it is fine to invest in them and sit on them. You might be better off investing the same
money in a better place.
Don’t read too much
Do not make the mistake of reading too much on the internet. It will throw up just so many
things that you will get confused. Stick to a good book if you want information on the topic.
You will have the chance to avail trustworthy information instead of something sporadic.
This book is a good investment for a beginner and will help you get started on the right foot.
Go through all the information provided and then start investing in the penny stock market.
Some people make the mistake of believing what they read in emails that they receive from
so called experts. That will only misguide you and cause you to invest in the wrong places.
Don’t short
Never sell short, you will end up creating a loss magnet. If even once you sell short just to be
done with a stock then you will do it often. All the small losses will accumulate and turn into
a big loss for you. So, you have to be careful and not develop the habit. Not saying you must
never short your stocks but do it only if there is no other way around it.
Don’t be unreasonable
Don’t have unreasonable expectations with your penny stock investments. It will help you
diversify your investments no doubt but you cannot expect to see overnight results. If you
invest money today then you must wait for at least a month before you can see profits that
run in the hundreds. Then increase it to thousands etc. But you have to remain patient and
not be in a hurry to see results. It is impossible to see any result so soon.
Don’t copy
Do not copy someone else’s investment strategies. Everybody’s investment plan will differ
and so will yours. Don’t pick a stock just because someone else picked it. You will end up
making a mistake if you do so. What works for others might not work for you and so you
should choose a path that is suitable for you.
Methods Used to Predict Trading

Here is looking at some of the prediction methods that you can employ to predict the trends
that stocks will follow.
Following trend
The first technique is known as trend following. This method is what most experts make use
of to predict the fate of a stock. The general belief with which they operate is that the stocks
that are rising will continue to rise and those that are falling will continue to fall. Using this
method makes it very easy for them to invest in stocks. Not to say this technique will always
work. But it will in most cases and so, it is a good technique to adopt.
Contrarian trading
Contrarian trading is what many experts use in order to avail lasting profits in the stock
market. The contrarian way of thinking is the opposite of trend following. They will invest in
stocks that are falling and sell the ones that are rising. The investor believes that the falling
stocks will start to rise and the rising ones will start to fall. This type of thinking is a great
way to judge stocks. You have to remember that it will work for you only if you know to pick
the best stocks.
Candlesticks
Candlesticks are a statistical method of predicting stock trends. You have to place
candlesticks on the graphs with a certain pattern in mind. You have to look at the highest
point and then the lowest point that the stock has reached. Then you have to find the middle
path and identify the levels that the stock prices will reach. Since this is a statistical method
you have to do a few calculations for it. If you are not adept at it then you can avail the help
of a friend.
Price action trading
Price action trading is another classic method that investors use to predict the trend of
stocks. As investors it is extremely important to know how the prices will rise and fall. For
this, they will look at the stocks monthly trends and predict which ones will rise and which
ones will fall. Say a stock rises on the first of a month and then falls mid-month. The trader
will be prepared for this and wait till mid-month to buy the stocks and then sell it during the
first week of the next month to remain with a profit. You have to identify and follow a similar
trend.
Range trading
Range trading refers to trading within a range that is pre-determined by the trader. So he or
she will know what the upper limit is and what the lower limit is. He or she will trade within
that range. Say the upper limit is $50 and the lower limit is $5. Within this range, the trader
will buy and sell the stocks. They will not bother if the price goes lower than $5 or higher
than $50. They are only bothered about the price staying in the same range.
Rebate trading
Rebate trading is a great option for those that are just starting out with stock trading. It is a
technique where ECN’s are used to trade. In an ECN, you make an investment and pay a
commission towards it. The system will invest your money in the market. There will be many
investors like you who will individually pay the commission and the company will profit
from it. This is seen as a safe method to employ, as the ECN will do a good job at creating a
large market and have enough money pooled in to invest in the best companies.
News following
News following refers to watching the news and looking for stock trends. As an investor, it
will be important for you to keep tab of all the stocks’ news and see which ones are doing
well and investing where will help you remain with a profit. You have to read about the
company reports and see if any mergers or acquisitions have occurred in the recent past. You
should also check for any products that were launched of late. All these will positively impact
the price per stock and investing in them will reward you.
Swing trade
Swing trading is a good technique to apply to trade in stocks. It is a technique that you apply
after you successfully identify the trend of a stock. Now suppose you bought a stock at $2. It
fell to $1.5 and you decided to sell your stocks. You will then have to buy the stock at the
same price point where you decided to vacate your position. Then, you wait until the price
reaches $3 or $5 and then sell it for a profit. This technique will help you remain in profit.
Artificial intelligence
Artificial intelligence is a technique where you allow the computer to do all the calculations
for you. You have to feed in data into it and allow the computer to give you the results. The
computer software will do all the calculations for you and tell you which the best stocks are
to invest in. It will get it right about 90% of the time but that 10% will always remain elusive.
You have to try and use a combination of candlesticks and this method in order to see
positive and sustainable results.
These form the different prediction methods that you can use to predict a stock’s trends.
Unavoidable Rules Of Day Trading Day
Trading Alerts
As you begin your journey in Day Trading Alerts trading, you would need to be aware of some
important rules of trading in Day Trading Alerts.
These are rules that you must swear by if you wish to make the most of your penny stock
trading. These have been formulated keeping in mind the different ways in which the market
operates and what you must consider when you pick a penny stock to trade with.
Always stick to your guts
It is important when trading in Day Trading Alerts to set your own rules and regulations and
make sure you stick to them. Don’t be easily swayed unless you are sure of your judgment.
Many times, it is easy to get carried away and buy stocks that you do not actually want for
yourself. You will only buy them owing to a suggestion that you get from somewhere. Doing
so will cause you to repent your decision later. You must stock to your plan and gut feeling.
You must know what you are doing and whether that is the right choice for you. If your gut
is telling you to not buy a stock then don’t know matter what you hear from another person.
But if your gut asks you to buy a stock even if it has a bad review then buy it. In addition,
once you have set up your maximum percentage gain and maximum percentage loss, stick to
this and don’t be in a rush to spend money; take your time.
Only use money that you are ready to put to risk
Trading in Day Trading Alerts can be viewed as a gamble from one viewpoint. Always do play
with money you are not afraid to lose. It is advisable that you do not use funds that you are
emotionally attached to like money for paying your bills or for doing other important things.
This is because you are likely to make a better-informed decision. If you know that the money
you want to invest is meant for paying bills and if you are unable to pay bills, you may be in
trouble, you are likely to be too conservative and go all out in making an investment. This
however does not mean that now you use money you are not afraid to lose that you can make
uninformed decisions. At the beginning of the month, set aside some money that you will
only use for your trading. This money will be used sparingly and you are prepared to take a
risk on it. Remember that there are no guarantees in the stock market and you might actually
end up losing money there. You will have to look into the consequences of your investments
just as you would look at the positives. A sound investor will ensure that he has calculated
the risk before putting the money into the stock market. So you must do the same if you wish
to gain from your investments.
Educate yourself about the market everyday
It is important to study the market on a daily basis to keep abreast with the underlying
factors causing the changes in the prices of stocks. Ask yourself whether you should have
traded in certain stocks or not after the market has closed down to make you prepare well
for your next trade in Day Trading Alerts. If you think you can read a book or two and
understand everything that there is to about Day Trading Alerts then you are wrong. Even
old hands who have been trading in stocks for several years will be open to learning from
the market on a daily basis. The markets will not always be the same and you must
understand the differences in the situations and take with you a new experience. It is ideal
that you take note of everything and ensure that you have it with you for easy reference in
the future.
Learn from your experience.
For you to make it in the penny stock trading, you must learn to accept your mistakes, learn
from them and move on to become better in Day Trading Alerts trading. The more you learn
from your past and use it in your current dealings the better, as you will be able to come out
successful in the penny stock market. Don’t keep thinking about it and worrying though. The
stock market can be extremely punishing at times but it will also pay back if you know how
to play it right. So don’t be over enthusiastic about a loss and end up making the same
mistake again in a bid to correct the previous one. A wise investor will know a situation and
its impact before it arrives. That is only possible if you understand the different situations
and learn from your prior experiences.
Be realistic
When determining your profit percentage gain, always try to be realistic. Setting a too high
percentage profit gain means a high risk of making a loss. So be realistic and set it at a point
of maximum possible gain but don’t set it too low either, as that will mean little or no gain. It
is recommended to set the profit percentage gain at around 10% for daily trading and setting
it at 20% for trends simply because trends are more determinable and you can be sure of
something good. Many might see 10% as too low but putting in mind 10 % for a whole month
added together can make some good earnings. So do not aim too high; it is always good to
play safe. If the opportunity presents itself for you to take an exit on a stock then grab the
opportunity immediately. Don’t think you will be able to go higher and gain more on it in the
near future. What if the pattern reverses and the price of the stock starts to fall. You will be
in trouble for it.
Be a quick decision maker
When it comes to making a decision, you need to be fast. There is no time or chance to waste.
However, that does not mean you dive in into any bid without giving it a second thought. Do
not just think but also think fast. If you keep hesitating, you will end up buying when the
trade is at it’s highest and you will end up being caught pants down. You will be the last man
standing at a loss as the demand usually reduces suddenly. Do not chase a stock up too long.
This is especially dangerous during the wee hours of trade. You will not know whether to sell
a stock or buy it. You will end up losing money and wonder why you did such a thing. Strike
while the rod is hot but remember not to get too close to the highest point of the wave. As I
said, you might be caught off guard.
Keep your funds liquid everyday
When you buy a stock, make sure you sell it on that same day or some few days later to
ensure that you have liquid assets. This is important simply because you need the money to
trade with especially when a good deal comes up. If you do not do that, you will be missing
an opportunity that might show up on the next day only to find your hands tied. One more
thing to note is that most of the Day Trading Alerts show a huge growth in a single day and
then it dies down the following day. So grab the opportunity while you have it. Buy and sell
the Day Trading Alerts the same day, as you cannot be sure of tomorrow.
Be your own boss in making decisions
A wise man makes his own decisions. If you have to listen to any advice, let it not be from a
person trying to convince you to buy or sell this stock, as you will be duped. People have their
own interests at heart so have your own close to you. Make independent decisions, as this is
the rule if you want to be successful in Day Trading Alerts trading. If you are easily swayed,
then it is good to remember that in Day Trading Alerts, prices also keep shifting. If you have
a broker who tells you to buy and sell stocks, you must know to say yes or no. They are only
meant to help you pick good stocks, it is up to you to research it and tell them whether or not
you are interested in it. The same applies to websites that suggest the stocks to you. They are
suggesting it based on their analysis of the stock. If you think it is not a good investment then
you have all the right to refuse it.
Only go for big news and nothing less
Earlier on, I stated that some news could be used just to influence the trade while in real
sense the news does not carry much weight only that they have been made to look like
something big is coming. Average news will give you average returns. Only big news can
make a kill so be on the lookout for something big when it comes to news.
In order to avoid making huge mistakes in trading in Day Trading Alerts, it is advisable that
you are aware of some common mistakes that people make. Below is a list of common
mistakes people do when trading in Day Trading Alerts:
*Pursuing an entry point above 50%
This is a very common mistake happens within the minutes or after the opening bell. Never
assume that the prices will go up. The current rapid upward movement usually is short lived.
Before you know it, you will find that the prices have gone down to low again. Avoid a stock
that gains within short periods and concentrate on those that take long to gain.
*Trade of between 25% to 50% of your total balance on any given trade to reduce the overall
trader account balance limits.
*Social media and message board hype.
*Holding your position for too long because we aim at catching a 25 to 50% gain in a given
trade. Therefore, once you reach your target it is prudent to exit your position.
*Buying randomly is not good as this can be because of message boards, a tip from a forum,
neighbor or friend, which can be misleading.
Tips And Tricks For Successful Day Trading Alerts Trading
When it comes to penny stock trading, there are a few criteria that you have to look into
before investing. They are as follows.
Volumes
Remember to always check the volume of trade. You have to see if there are good volumes
for the penny stock, or at least 100,000 at any given point in time. Anything less will mean
that the stock is moving very slowly. You have to try and pick a company that is traded on a
day-to-day basis and not on a weekly or monthly basis. There is no point in investing in a
company where there are many sellers and few buyers at the same time, if you are looking
to invest in a company where many buyers have queued up then your chance at buying the
stock might never come about. So, you have to pick a company that will allow you to avail
the stocks with ease. You can take the help of your broker to find the ideal company and if
you don’t have a broker then you can do a quick search of the best Day Trading Alerts to
invest in and invest in them.
Results
It is extremely important to look for good result oriented companies. As soon as they publish
their reports you have to check them out and ensure that they are going to be good
investment choices. The results should be such that the profits have surpassed expectations.
Generally small companies aim for results in a few hundred thousand and if you are
impressed with the numbers and also know what their liabilities look like then you are good
to invest with the company. Remember that these results are always published quarterly and
it is important for you to look at all the results and then judge whether the company is good
or not.
Name
The name of the company will also matter quite a bit. You have to see if the company is
famous and has made a name for itself or not. Even if it is not really famous it is important to
see whether there are any tarnishing stories. Some people prefer not to invest in such stocks
and will keep away from them. But if you are not a fundamentalist and only rely on technical
analysis then you can invest in any company of your choice. But it is important to do a
background check of the company in any case.
Reliable Information
Remember to take your information from reliable sources always. The information should
be trustworthy and not spurious. If you get a tip off about a certain company you have to
ensure that it is 100% reliable and will help you make the right investment choice. There is
no point in choosing a company whose false rumors have caused a spike in its stock’s
demand. You will end up wasting your money and the stock will not prove to be a good
investment. Therefore, it is important for you to avail only reliable information and invest in
good penny stock companies that will work well for you in the long run.
Corrections
It is important for you to remain patient during corrections. The stock price will drop when
corrections are going on and if you are impatient with it then you will end up losing money.
You have to look at the status of the company and also do all the calculations to see if it has
been listed at the right price. If it is over or under valued then the corrections are bound to
come about. You have to remain prepared for it and wait it out instead of selling short in a
panic. You can check any of the news sites to see if a correction is happening.
Day Trading Alerts trading can promise huge returns when done right. We will look at some
useful tips that can be of great help in helping you increase your yields.
Don’t hire penny stockbrokers unless you really have to
One of the most important things to do is not to hire penny stockbrokers unless you really
have to. These brokers usually require higher commissions and multiple fees, which may eat
into your penny stock earnings. Furthermore, penny stockbrokers will be paid a commission
whether you experience financial gains or losses. So they will not put in the efforts to ensure
that you always remain in gains. There are also theories that the company will try to employ
those that have good convincing skills and even when you are not interested in a particular
stock, you will end up buying it. Look for a discount online trading place that will give you
the opportunity to trade Day Trading Alerts independently and not depend on the brokers
to do your buying and selling.
Don’t invest in Day Trading Alerts whose trading volume is less
than 100000 per day
You should also choose the Day Trading Alerts you want to invest in very carefully. Try as
much as possible to avoid those that trade in volume less than 100,000 per day, as they are
likely to be less liquid. As you know, the price per share of these stocks is very low so you
must look for those that are actually being traded and not merely having a good low price. If
the prices of such stocks start coming down, you are unlikely to find someone willing to buy
since the shares’ volume is quite low.
Do not invest in Day Trading Alerts from the same industry
The trick to making it big in whatever kind of investment you are making is to diversify. This
is the same case with investing in Day Trading Alerts. Never invest in Day Trading Alerts in
the same field of industry; however good the industry may be doing since if such an industry
starts crushing, you would lose all your investments. It is always best to diversify your risk
when you invest in the stock market. If you think the IT industry is faring well and it will pay
you well to buy stocks from companies that belong to that industry then it is best to
reconsider your evaluation and split your risk to ensure your investment’s safety.
Focus your attention on company behind the stock
While focusing your attention on the actual stock is a good strategy, focusing your attention
on the company behind the stock is the best strategy. You should know if the company is
working on any technologies, new products or services and innovative products, as this will
affect the price of their stocks. This best way to do so is by looking at their fundamentals and
also reading their news. These are the best places for you to study the company’s internal
details. If you have knowledge about the company’s products then do a self-analysis to
understand where the company is headed.
Always be informed
You should also ensure that you are informed of everything that may be happening in the
penny stock market. Ensure that each day you scan through publications or other resource
that may have some coverage on penny stock activities.
How To Successfully Trade Day Trading Alerts
Knowing what you do now, which is the important basics of penny stock trading, here are
several ways to trade in Day Trading Alerts that can help you increase your chances of
successfully trading them and reducing (not eliminating) the associated risks.
Don’t focus on the success stories
In his best-selling book The Art Of Thinking Clearly, Rolf Dobelli wrote about a psychological
habit called The Survivorship Bias, which is one of the obstacles to thinking clearly, which
you’ll need if you want to succeed in Day Trading Alerts trading. According to Dobelli, the
survivorship bias is our tendency to overestimate our chances of succeeding in our chosen
endeavors because of our – and possibly society’s – tendency to focus more on the possibility
of success than the risks of failing. This is exacerbated by most people’s tendency to label
people who are either cautious or realistic as either party-poopers, pessimists or worse,
failure-minded people. It’s as if being mindful of possible risks and dangers is a mortal sin
that can’t be forgiven in this life or the next!
But as Dobelli points out, it is a bias because it tends to glorify positivity over realism. In fact,
much of your success – be it in Day Trading Alerts trading or in life – can be learned through
the stories and lessons of failures. Consider Thomas Edison’s success in inventing the light
bulb, which clearly changed the human race for the better! He learned more from the failed
experiments than from the one single successful one. He said that he didn’t “fail” in those
numerous experiments that didn’t work out because with each failed experiment, he learned
another way not to create or assemble the light bulb. By knowing the many, many things
that don’t work, he was able to avoid them and narrow down the ideas that worked.
Funny but in my personal trading experience, be it with Day Trading Alerts or exchange-
traded ones, the most unforgettable lessons were from my or my friends’ trading
failures. It’s probably because the more powerful motivation in my doing many things in life
is avoidance of pain, the other motivation being love of pleasure.
When you focus on the success stories, you can greatly overestimate your chances of success
and blind you so much to clear signals, which may cause you to lose money in your
trading. It’s not that you should disregard success stories. No, that’s not the point. The point
is to have a balanced view or approach – consider both the successes and failures. In fact,
for every success story or principle you find, look for 2 or 3 stories of failure and loss. In as
much as you’ll need to know what to do to earn great returns from your Day Trading Alerts
trading, you should also learn what not to do in order to keep your shirt on and succeed more
often.
Focus on the disclaimers instead of tips
More often than not, Day Trading Alerts are sold not bought. What this means is in many
cases, the demand for such is weak and for investors to snap them up, they need to be actively
promoted and sold, compared to exchange-listed shares of stock of established companies
like Apple, Inc. Most Day Trading Alerts are sold via free emails and newsletters that give
“tips” about the Day Trading Alerts being sold. The problem with these newsletters and
emails, however, is transparency. Day Trading Alerts trading expert Timothy Sykes says that
these newsletters and emails don’t give tips out of a heart of sincere goodness and desire for
you to succeed. If you check out the bottom-most part of these emails and newsletters, you’ll
find their disclaimers about the email and the tips therein. You’ll realize, if you check out
these disclaimers, that the people or institutions that emailed you those free tips about Day
Trading Alerts of particular companies are actually paid by the companies that issued those
Day Trading Alerts in the email or newsletters to pitch their stocks and provide good public
exposure for such. Although exposure isn’t necessarily an evil thing, Sykes says that almost
every Day Trading Alerts newsletter or email pitch promises that aren’t entirely true in order
to promote the Day Trading Alerts in question.
There’s a huge difference when a stock reaches an all-time high in terms of trading price due
to record earnings and when it does so simply because intensive promotion of said stock by
a couple of email and newsletter senders. How do you know which is which? One of the best
ways is to pay attention to a very important part of such emails and newsletters that are
often times taken for granted: the disclaimer. If a newsletter or email giving tips on
particular Day Trading Alerts don’t have a disclaimer, disregard it because off the bat, you
already know it isn’t legit. It’s because the SEC requires senders of such emails and
newsletters to put disclaimers on their emails and newsletters and it is through these
disclaimers that you’ll be able to see potential conflicts of interest. Without a disclaimer, it’s
clear that there already exists a conflict of interest and it’s normally between yours and
theirs.
Lastly, Sykes says that these newsletters are often paid merely to increase demand for a stock
by pump up it up and rarely do these give you tips on when to sell. If ever they do, according
to him, it would’ve been too late. Think of it this way – if a penny stock were really a good
one, there’d be very little need to promote them via newsletters and email. Investors would
flock to it and you, as an active investor, would most certainly hear or read about it one way
or another.
Sell fast
Remember that you’re trading Day Trading Alerts, which is different from long-term
investing. Long-term investing involves a buy-and-hold approach and is long term in nature,
which requires you don’t sell or liquidate your position quickly. Trading, on the other hand,
is like speed dating – it’s all about speed! And one of the cardinal rules for success of such is
being able to quickly liquidate as soon as you reach your realistically set profit target. As
with some romantic relationships, being clingy when it comes to Day Trading Alerts trading
can spell disaster for you. Consider my trading experience many, many years ago.
After doing a good enough research, I bought stocks of one of the up-and-coming but
relatively popular real estate companies. Within 2 days, the price of the stock went up by
about 5%. In the next 3 days, it went up further by another 5%. During the 1st trading week
since I bought the stock, I already earned 10% net profit. Trading sense would dictate that I
already liquidate. I mean, if a 10% annual return is already in and by itself a huge gain, what
more a 10% return in a week!
Being the relatively inexperienced – and stubborn one if I may add – trader that I was at that
time, I held on to the position and refused to liquidate. I made all possible excuses for doing
so such as technical analysis charts that I felt indicated a continuation in the rise of its price,
among others. Fortunately, the stock’s price did rise further. In about 2 weeks since I bought
the stocks, I already made 30% in paper profits. You would’ve thought that given my rather
fortunate experience, I would’ve liquidated already, right? Wrong! I became even clingier.
On the 3rd week, the stock’s price dipped and the return on my investment was down to a
respectable 20%, which was still quite remarkable for a mere 3-week-old investment. You
would’ve thought I’d liquidate by then and cash in on my profits, right? Wrong! I still let my
clinginess rule my otherwise objective trading strategy and insisted that the dip was a mere
“correction” and that the bullish or upward trend will eventually continue and persist.
It never did. To cut the long story short, I held on to the stock until I suffered losses on my
position. Had I liquidated early considering my strategy was one of trading, I could’ve earned
a handsome 10% return on the first week or even 30% in a mere 2 weeks. But because I was
quick to buy and slow to sell, I suffered the consequences.
Remember that when it comes to Day Trading Alerts trading, greed is your worst enemy.
Don’t rely on what management says
In the world of marketing, testimonies about a product or service are very important. It’s
because to some extent, it gives you a glimpse of how good – or bad – the marketed product
or service really is. Customers who give reviews of a particular product or service are
deemed to be good sources of information on the purported benefits or superiority of a
product because of the perceived lack of bias as people who don’t stand to benefit from
increase sales of the product or service. When businesses are revealed to have paid or have
given other fringe benefits to people in exchange for or to encourage good public testimonies,
the public backlash is often wicked and unrelenting. Testimonies or promotions need to be
as free from perceived ulterior motives as possible. They need to be perceived as
independent from any undue influence.
Management’s statements and press releases about their respective companies, whether we
like it or not, should be taken with a grain of salt. In fact, it may be better to disregard them
altogether. Why? It’s because they have a vested interest in making such
statements. There’s a 50-5o chance that they’re not entirely truthful because they are under
shareholders’ pressure to drive up their companies’ stock prices in order to, among other
things, raise funds to continue operating the business profitably. With the relatively scarcer
information about penny stock companies compared to exchange listed ones, it’s quite a
challenge to validate the veracity of penny stock companies’ management’s claims as to
corporate health and performance.
Given that the management of penny stock companies are innocent until proven otherwise,
you shouldn’t put all your faith in their statements but merely consider them together with
other important information such as audited financial statements (where available) and
industry performance and outlook. You should also check out “rumor mills” like online
forums and group discussions to get a feel of what other people know about a particular
penny stock you’re considering trading in the immediate future.
Totally dismissing or disregarding managements’ statements about their respective penny
stock companies is a rather extreme measure much like throwing away the baby together
with the bath water. Relying on them is like throwing away the baby and keeping the bath
water. Throw away the bath water but keep the baby by considering managements’
statements in conjunction with other seemingly more objective sources of information to
increase your chances of penny stock trading success and lower your risks of failing in doing
so.
Never short sell
If you’re not familiar with the term, this is what it means: Short selling is a speculative
activity where you sell something that you don’t have with the expectation that by the time
you need to deliver the goods, the price of such goods would’ve dropped significantly in
order for you to make a good profit. Short selling is normally done by borrowing shares you
don’t own, selling those shares and when the price goes down, you buy the same number of
shares to return to the person or institution you borrowed the shares from. Short selling is
a popular strategy among traders in bear markets, i.e., when the prices of securities like
stocks are on a downtrend. The idea is to sell today at a higher price and buy the security to
be delivered later at a lower price. It’s just a variant of the trading success formula of buying
low and selling high where you sell first before buying.
Short selling has got to be one of the most ingenious trading strategies ever conceived by the
trading man. It has to be since it allows you to make a killing even when the market for a
particular security is on the decline. Despite the seemingly bulletproof logic behind the
strategy, it carries with it a great risk of you losing your money and your
reputation. Considering that penny stock trading in and by itself is already a higher-risk
proposition compared to investing in exchange-listed stocks with huge market
capitalizations with already established names.
Short selling Day Trading Alerts can significantly increase your risk for potentially huge
losses. One reason is compared to publicly listed stock on organized exchanges, Day Trading
Alerts quoted on the OTC Board aren’t mandated by law to be registered with the SEC nor
are they required to submit current financial statements. As such, prices of Day Trading
Alerts tend to be volatile and open to manipulation, both of which can significantly affect
share prices very abruptly. When volatility or manipulation suddenly drives up the prices of
the Day Trading Alerts you shorted, you are in an enviable position of suffering potentially
huge losses.
There are many times when you wonder if it is a good idea to short sell a stock that is actually
doing badly or is on the decline. But remember that you are only adding to the chaos and
worsening the situation. Don’t lose your cool in a bad situation and remain put.
Another reason why short selling Day Trading Alerts can work more to your disadvantage is
the problem of liquidity or availability of such shares in the future when you need to buy
them back. Often times, Day Trading Alerts are very thinly traded compared to their
exchange-listed counterparts and when you need to cover a very short position, volume may
not be enough to allow you to do so leaving you with a tarnished image, losses or both.
Penny stock trading is already risky as it is so my advice: leave short selling to the experts
who have a wealth of experience on the practice as well as deep pockets.
Focus on high trading volume
Remember about liquidity being a key issue of trading in Day Trading Alerts? The key
indicator for liquidity is trading volume. Why? The bigger the volume, the greater the
interest in the penny stock is, which indicates a very good potential for price increase and a
much better chance of getting out of your position quickly. If you choose to trade a thinly
traded penny stock, i.e., one that has low trading volume, the risk of its price going down is
high as well as your liquidity risk, i.e., the ability to liquidate your shares on time and at the
price you want.
You may ask: What makes for a high daily trading volume? For purposes of this strategy,
consider Day Trading Alerts with an average daily trading volume of at least 100,000 shares
to be one with high trading volume. Anything less, stay away from them.
To show you the importance of trading volume in reducing your risks, consider this example
with 2 scenarios. You bought 100,000 shares of Penny Stock A (PSA for brevity) at $0.20 per
share for a total cost of $20,000. In scenario A, PSA’s stock price went up to $0.25 per share
for a paper profit of $0.05 per share or $5,000 equal to a return-on-investment of 25%, which
is quite a lot. If PSA’s daily average trading volume is just, say, 50,000 shares, you won’t be
able to unload all your shares at $0.25 per share. You’ll have to sell the remaining 50,000
shares the next day but there’s a chance the price will have changed by then. Good if it goes
up, but if it goes down to, say $0.23 per share, your trading profit for the 50,000 remaining
shares will just be $0.03 per share or $1,500 and if you add it to the ones you already sold
earlier, your total profit goes down to only $4,000 from $5,000 initially. That’s a difference
of $1,000 or 20%!
In scenario B, PSA’s stock price goes down to $0.19 the day after and you decide to
liquidate. If the stock’s average daily trading volume is high, proceeds of the sale of all
100,000 shares of PSA will yield you $19,000 or a loss of $1,000 on your $20,000 investment
– a 5% loss on investment. If average daily trading volume however, is at only 50,000 shares,
you’ll have to share the other half of your holdings the day after. If assuming for the sake of
argument that the share price of PSA falls further to $0.18 per share, your proceeds for the
remaining half of the shares will only be $9,000. Adding up the proceeds of the 50,000 shares
sold at $0.19 per share – total of $9,500 – and the second 50,000 at $0.18 per share, total
proceeds will be $18,500, which is $500 less than if you were able to sell all the day
before. That translates to an additional 3% loss on your $20,000 investment that brings your
loss on investment from only 5% to 8%.
Create and strictly implement trading stops
What are trading stops? These are price levels you determine to be action triggers to either
buy or sell shares of stocks. Often, they’re called stop-loss limits or take-profit triggers, the
former being the price at which you’ll have to liquidate your position in order to limit your
losses and the latter being the price at which you need to liquidate to realize a minimum
amount of profit.
Why create or set up trading stops? It’s to help prevent you from trading with your heart
instead of your head, like what happened to me in the example I gave in the section on selling
fast. Emotions have the uncanny ability to muddle one’s good judgment, especially when it
comes to trading stocks. I can lay the claim to being an expert on that matter because I have
experienced losses on account of trading by heart and not by logic.
So what is the ideal trading stop levels for you when it comes to Day Trading Alerts
trading? The key lies in your risk tolerance or capacity for potential losses. Ask yourself how
much losses can you tolerate both in terms of percentage and $ value? If for example, you
determine your loss limit at 5%, your take profit levels at 10%, and that you’re willing to
start trading with $1,000, you can compute for stop-loss and profit-taking trading stops as
follows if you bought 1,250 shares of Penny Stock B (PSB) at $0.80 per share:
Loss Trading Stop = Purchase Price X (1 - %limit)
Loss Trading Stop = $0.80 x (1 – 5%)
Loss Trading Stop = $0.80 x (95%)
Loss Trading Stop = $0.76 per share
Take Profit Trading Stop = Purchase Price X (1 + %limit)
Take Profit Trading Stop = $0.80 X (1 + 5%)
Take Profit Trading Stop = $0.80 X (105%)
Take Profit Trading Stop = $0.88
There you have it – your trading stops of $0.76 and $0.88. When your stock price hits either
price stops, it’s time to liquidate.
The easy part of this trading tactic is determining your trading stops. The challenging part
is implementing it, considering that you’ll be going up against your emotions. Believe me,
emotions are powerful so never underestimate it and give it an inch to rule your trading
activities. You’ll have to be strong and resist the urge to hold on to your penny stock once its
price hits either trading stops. Yes, these stops aren’t prophets that can perfectly predict
what’s gonna happen to the Day Trading Alerts’ prices but they do help you minimize trading
with your heart and help you rely more on objective logic in doing so, which increases your
success of trading Day Trading Alerts successfully.
Never settle for less than the best
If you don’t settle for anything less than the best value for your money when shopping for a
coffee maker, television, car, house or even a spouse, shouldn’t you be doing the same for
Day Trading Alerts to trade in? Compared to the choosing inferior quality stuff, choosing the
wrong penny stock is much like choosing the wrong spouse: it can be quite costly.
When we say choosing the best Day Trading Alerts for trading, we’re talking about
companies with great earnings or whose penny stock prices are breaking out of 52-week
highs with an average daily trading volume of at least 250,000 shares. Why is this so?
First, let’s consider earnings. The value of stocks, be it penny or regular, are hinged greatly
on income, particularly expectations about future income. It stands to reason that penny
stock companies that aren’t doing well earnings-wise can’t be expected to produce great
income in the near or medium term. It’s like betting on a power lifter attempting to bench
press 500 pounds. Would you bet on a power lifter to press 500 pounds if the heaviest the
dude has ever pressed is just 300? Rational expectations, baby!
Second, consider trading volume. It may not do you much good to buy 100,000 shares of a
penny stock of a company with great earnings with an average daily trade of only 5,000
shares! Remember, you’ll only truly realize profits from your trading when you are able to
sell the shares at a higher price. No matter how high the price goes up, your profits will just
be considered “paper” if you’re still holding on to them. Remember liquidity and how
important it is making the most profit out of your trading? The bigger the volume, the higher
the liquidity and consequently, your potential profit.
Lastly, why consider if its stock price has broken through the previous 52-week
high? Despite the absence of an airtight set of arguments and evidences, it is believed that
the previous 52-week high price level is a good resistance level, which is defined as a price
level that acts as some sort of a psychological cap for many investors. It’s the price at which
many investors think prices bounce off from and start to go down, much like the ceiling that
limits the height at which helium-filled balloons can fly. Once prices break through or exceed
a solid resistance level, it’s believed that the investors’ mental price barrier has been broken
and that it signifies a new period in which a stock’s price will continue to rise even more. It’s
like the ceiling caving in, which allows the balloon to fly even higher.
Limit your position size
Your penny stock trading profits and losses are a function of price movements and position
size, i.e., number of shares. It stands to reason therefore that the bigger your position, the
higher your potential trading income…and losses. In this regard, you should carefully
consider your position’s size in order to strike a good balance between profit and risk.
Consider a $0.05 price movement in the shares of penny stock C (PSC). If you bought 50,000
shares of PSC and the price moved upward, you’d earn a profit of $2,500.00 compared to only
$1,250 if you just bought half the number of shares or 25,000 shares only. However, if it
moved downward by the same amount, you’d suffer a larger loss of $2,500.00 compared to
a loss of only $1,250.00 with a smaller position of only 25,000 shares. Given all things equal,
the size of your position can spell a big difference in your Day Trading Alerts trading success
or failure.
Another reason for limiting your position size is for liquidity. The smaller your position size
is with respect to a particular penny stock’s average daily trading volume, the easier it is to
liquidate such a position and lock on your profits or minimize trading losses. The higher
your position size relative to average daily trading volume, the higher your liquidity risk
becomes.
So how do you determine your optimal position size for trading a particular penny
stock? There are 2 ways to do it: liquidity approach and risk tolerance approach. Using the
liquidity approach, you simply limit your position size in a particular penny stock to no more
than a certain percentage of its average daily trading volume. If for example, penny stock D’s
(PSD) average daily trading volume is 100,000 shares and you set your position limit to 20%
of that volume, your maximum position size in PSD is 20,000 shares.
If you choose to use the risk tolerance approach to limiting your position size, you’ll need to
determine the maximum loss you’re willing to tolerate both in percentage terms and $
amount then use the following formula to determine position size in $ terms:
$ Maximum Position Size = Maximum Loss in $ Amount ÷ Maximum Loss in %
For example, you determined your loss tolerances at 5% and $100 per trade, your position
size using the formula would be:
Maximum Position Size = $100 ÷ 5%
Maximum Position Size = $2,000
Once you determine your position size in $ terms, simply calculate the number of shares by
dividing the amount over the current trading price to determine your maximum position size
in terms of shares.
Love is a crime
Brian May, the former guitarist of the great rock band Queen, wrote a song about the dangers
of loving someone too much, which was aptly titled Too Much Love Will Kill You. Although
the context of that song was romantic love and feelings for an actual person, the same song
can also be sung for penny stock trading! Loving a penny stock too much can make you clingy
and refuse to let go of the stock when you need to. Too much love or attachment to a penny
stock can cloud your better judgment and increase your risks for unsuccessful penny stock
trading.
Attachment to a particular penny stock – also known in emo circles as being clingy – is a
result of several things such as greed, focusing too much on success stories (survivorship
bias) and relying primarily on management’s statements and press releases, among other
things. So how do you become or continue staying detached from your favorite penny stock?
First, you need to be content when you already achieve or slightly exceed your target
profit. This is a good way to control or even overcome one of our biggest
weaknesses: greed. Contrary to what Gordon Gekko’s1 doctrine that greed is good, it
isn’t. Look no further than my experience with that real estate company stock where I
wasted paper profits of 30% in a couple of weeks because of my desire for even more profits
and reluctance to cash in on what was already a very, very good return. Greed is possibly
the most powerful emotion that perpetuates a strong clinginess to particular Day Trading
Alerts.
Second, you need to consciously overcome or address the survivorship bias by doing your
homework and researching on penny stock horror stories too instead of just honing on
success stories that are often exaggerated or worse, fabricated. Learning the horror stories
can help ground or level your expectations and in the process, significantly reduce your
attachment to a particular penny stock.
Lastly, you should significantly lessen your dependence or reliance on management’s press
releases and promise concerning their penny-stock issuing company’s earnings and financial
health. As you learned earlier, their statements should be taken with a grain of salt and
validated or considered together with other more objective sources of information and data
because of conflict of interest that’s inherent with their position in the penny stock issuing
company and the bonuses that come with their ability to increase the company’s penny stock
price. As we noted in an earlier section, some of the best sources for validating
management’s statements and press releases include their audited financial statements,
forums and discussion groups on their Day Trading Alerts or the Day Trading Alerts market
and expert estimates and forecasts of the future expectations for the industry to which a
particular penny stock company belongs to.

1 The primary character in the movie Wall Street and Wall Street: Money Never Sleeps.
The very first thing to understand here is that your number 1 priority in the stock market
should be to cut out on losses. You cannot allow ego to get in the way and dictate your
investments. If you know that you have made a wrong investment then you have to fix it at
the earliest.
You have to keep a close watch on the stocks as soon as you invest in them. You have to look
at the trend that is taking on. If it is going as per your plan then you can kick back and watch
it rise but if you think that it is going the other way then you should immediately sell I even
if you have realized only a little profit from it.
One golden rule of Day Trading Alerts is that you have to focus on the small gains and not
chase the big ones. You have to learn to look at the small gains as the reward in the penny
stock market. These small gains are what will all add up and give you the big profits.
As you know, the penny stock market is one of the easiest places to short. This is mainly
because the stocks mostly follow a set pattern. Many beginners as well as old hands easily
predict the direction in which the stocks will move. So on a given day, you will have the
chance to predict at least 70% of the stock’s direction and use it to your advantage.
You have to consider your Day Trading Alerts to be both a long hold and a short hold
investment. It is really hard to pick just any one strategy to deal with in the penny stock
market. You have to be the judge of it and use your intelligence to determine the long and
the short-term investments.
The penny stock market is rather hated upon by some purists as they are against the idea of
investing in a place that is so predictable. They prefer to invest in places that are predictable.
But you must not have any such opinions, especially if you are just starting out. Think of the
penny stock market as a great place to make your first investment.
Penny stock market is a place where once you start investing you will keep doing it until you
are thoroughly satisfied. So it is a good idea to keep track of all your investments by making
a recording of it. You can record it on a digital diary if you like and can also maintain a
physical journal for it. That way, you can keep track of all of your investments.
It is important that you take your internet connection very seriously. This means that you
have to treat it as your most important investment if you wish to make the most of the stock
market. You have to have a reliable connection and also maintain a dongle that you can use
in case of emergencies.
Do not make the mistake of underestimating an undervalued stock. Many people do all the
requisite calculations but then wonder if they are doing the right thing by investing in an
undervalued stock. If you do not invest in it then you will be missing out on one of the best
ways of making money in the stock market.
At the same time, you have to give a cold shoulder to an under-valued stock that is illiquid.
This means that you have to move past a stock that has not been traded in the market of late
even if it is a great stock on paper.
How much risk you need to take in the market completely depends on the market situation.
You have to look at and assess the market mood in order to make the most of it. If the market
is doing great and looks like it is going to do well for some time then you have to invest big.
But if the market looks dull and drab then it is best that you not venture into it.
Don’t make the mistake of believing everything that you read about. You have to be 100%
sure about something before making any kind of investment. You have to be sure that the
information has come from a reliable source and is not some spurious press release. Check
with other sources before deciding whether or not the news about a company or a stock is
true.
Some Day Trading Alerts will go really low but then they will recover just as well. You have
to keep the faith and believe that it will happen. This is especially if you have done all the
calculations and know for sure that the company and stock is promising.