Considering Investing or Trading Penny Stocks?
Before you cross this path, keep in mind you must be welling to dedicate long hours of research and learning.
The indicators and charts along with your technical tools are extremely important to become a successful trader.
The RSI or (Relative Strength Index)
An indicator that specifies overbought and oversold status for a specific stock. When the RSI reaches above 70 the stock is overbought meaning a sell off maybe near. When the RSI reaches below 30 it means the stock is oversold and a bounce is very possible sense more traders are interested in a stock at cheaper prices.
The MACD or (moving average convergence/divergence)
Is an indicator used to spot changes in the strength, direction, momentum, and duration of a trend in an instrument's price. This indicator was developed by Gerald Appel in the late 1970s. The MACD is a calculation of the difference between 2 EMAs (exponential moving averages) of closing prices.
These two basic indicators are what I recommend perfecting, after you are flawless with estimating a stocks direction using the MACD and RSI. You are ready for the next phase of becoming a successful trader.
Next step is to setup your stock screener using the proper filters, you also want to read and stay up to date on social media sites regarding the stock you are interested inn.
What is everyone saying about it, is it a buy, sell or hold?
Is there a short in the stock that may cause a sharp price drop you should watch out for?
The press releases coming out, which ones are hitting main stream media; are other traders out there selling or buying when the news hits?
You have to be very cautious when trading stocks, your investment is your lively hood. Making money is allot easier then you feel, you just have to stay calm and remember not all trades will be winners. Your objective is to average out with profits in a years’ time.
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