Top 3 Tips to Perfect Your List
Tip: If you want to speed up the process of learning everything I teach, then study the past.
It seems like everyone just wants hot stock tips. The problem is that most people aren’t prepared to capitalize on a perfect play.
You still need education and knowledge. If you want access to my daily stock watchlist, you can get it here. But I urge you to also watch video lessons and learn this stuff. My team and I have catalogued tons of different stocks and examples.
Studying the past can be the key to your future.
Penny Stocks Watchlist
I’ve said it before: Penny stocks are very inefficiently priced. Far fewer traders follow penny stocks than large-cap stocks. This means when price fluctuations happen, you have time to get in on a big swing.
What does this mean for your watchlist?
For example: If a penny stock spikes 20% in one day, you still have time to ride the wave created by the news. This is why, when it comes to penny stocks, you want to look at the day’s biggest percent gainers.
If the gain is supported by the right news, the right catalyst, and the right chart breakout, it could keep going and give you the opportunity to trade — and potentially and make a profit. But if you see a big percent gain without news, be wary of trading the stock.
I don’t like to trade a stock based solely on the percent gain. I want to know the specific catalyst. Percent gain is a good indicator to go do some research. But then you’re looking for news.
One thing to clarify: You want to watch stocks that are ‘in play.’ Stocks that are sideways or just sitting there doing nothing don’t give you the potential to trade for a profit. So limit your penny stock watchlist to market movers.
Finding Hot Penny Stocks
It all starts with finding the biggest percent gainers from the previous day. Don’t start with the biggest losers, or a company that has a good product or service — focus on the biggest percent gainers.
Remember, a lot of the news doesn’t have legs past the first day. In other words, you might see news on a stock and think you want to keep an eye on it. But then news about the stock goes silent. You can drop that stock from your list.
If news about a stock carries on to day three or day five, then keep watching this stock. It might be primed for the kind of setup you look for to make a play.
Volatile and Low-Priced Stocks
As I said above, volatility is a positive for trading penny stocks. The advantage to trading volatile and low-priced stocks is that small price movement equates to a high percentage price movement.
For example, if a stock is at $1 and it shifts 20 cents, that’s a 20% movement. If a stock is at $20 and moves 20 cents, that’s only a 1% shift.
So volatile and low-priced stocks can potentially have a huge upside for you as a day trader.
Watchlist Tips for Traders
If you’re already trading, then you likely keep a watchlist already.
So here’s a couple of tips for you that can help make your process more efficient.
1. Create Watchlists Based on Current Factors
Historical plays are good to study if you want to recognize the patterns. But what about your watchlist, right now, today? You have to base your watchlist on what’s happening now.
How is the market trending? What kinds of plays are working today? If you’ve read my book, An American Hedge Fund, you know the market shifted the second half of 2000. I had to sit on the sidelines for a while to look for a new strategy.
It wasn’t just 2000 … it has happened again and again. The point is, you have to pay attention to what’s happening right now.
2. Use Your Previous Watchlists as a Reminder
At the beginning of this post I mentioned habits. Part of being an efficient trader is developing good habits. One of the best habits you can create when it comes to watchlists is to review your previous day’s watchlist.
You might scrap the entire list and start over based on the day’s biggest percent gainers or some catalyst. But it can often give you an idea which stock to watch the next day. Every single night, when I build a watchlist, I look at the previous day’s watchlist.
3. Master Your Trading Skills
I’ve said it over and over again … it’s become my life mission: Education and knowledge are KEY to getting ahead in this game.
When I first started trading back in high school, I immersed myself in learning how the markets work. It was time well spent. And now I want to pay it forward.
My hope for you is that you educate yourself just as well. But the awesome thing is you don’t have to go searching for all this information the way I did. The world has moved forward, technology has advanced, and you can get what you need a lot faster.
You’ll still need to do the learning. But guidance is right in front of you. To start, you can take advantage of my excellent trading courses. It’s a great way to familiarize yourself to a potential career in trading penny stocks.
The Bottom Line
Are you ready to get serious about learning to trade? Then start your watchlist. Today. Don’t put it off.
Here, you learned some solid tips to help you start the smart habit of keeping a daily stock watchlist. You’ve learned what information to include, what to avoid, and how to use the watchlist to your advantage. What’s next?
Study, study, study. When you’re done studying, study some more.
— Tim Sykes
Editor, Penny Stock Millionaires