Building a Watchlist for the Coronavirus
Dear Penny Stock Millionaire,
With the internet and online brokers, you can trade penny stocks from anywhere in the world. As far as the basic requirements, you only need a decent laptop, solid Wi-Fi, and a trading account. But don’t be fooled into thinking you’re gonna succeed if you jump right in.
Because 90%+ of traders lose. So be willing to invest in your education — because if you don’t, the market will make you pay a much higher price.
The first step in being a better trader is building a watchlist. How do you build a watchlist? I’m so glad you asked.
Here are five tips on how to choose the best penny stocks to watch…
Tip #1: Look for Big Percent Gainers
My method of choosing which penny stocks to watch always starts here. At the end of every day — and again in premarket — I look for the biggest percent gainers. And that’s what I focus on. I’m not interested in stocks that aren’t on the move.
I recommend using a stock scanning platform instead of doing it manually. I personally use StocksToTrade stock scanning software. With 40+ built-in scans — some created specifically for my strategies — it’s amazing right out of the gate, and I helped to create it!
Tip #2: Look for Big Volume
The next thing to look for when choosing the best penny stocks to watch is trading volume. Sometimes stocks gain momentum and spike big even without news. Especially when there’s enough volume.
After I find the big percent gainers, I organize them according to trading volume. Be aware of dollar volume traded, too. If you have a true penny stock trading at 2 cents a share, and it trades one million shares, that’s still only $20K. You have to be meticulous.
Tip #3: Look for a News Catalyst
The next thing I look for when choosing penny stocks to watch is what’s making it move? Is there a press release announcing a new contract? What about positive earnings?
In biotech and pharma penny stocks you might see news of test results, or a merger.
Tip #4: Look at the Long-Term Chart
When you’re trying to find the best penny stocks to watch, it’s easy to get fooled by one-day or one-time spikers. So look at long-term charts to see if the stock has a history of multi-day runs or has gone supernova in the past.
Which long-term charts? As many as you have time for, really. But at the very least, look at the one-year chart. I like to look back a couple of years depending on the stock and the news. If the stock trades a certain way when the company announces a big contract, I want to know.
Tip #5: Use a Social Media Scanner
It might sound a little strange if you’re new to penny stocks. But if you want to understand which penny stocks to watch, one of the best ways is to see what others are watching. Or, more accurately, hyping.
Yes, Twitter has become a vehicle for influence with stock traders. Want to know which penny stocks are being heavily shorted because they’re up 50%? Check out Twitter. I use StocksToTrade because the scanner is built-in. All you have to do is open the Twitter scanner and, voila, you get a running feed of stock tweets. And you can customize the feed if you like.
Frequently Asked Questions About Penny Stocks
I get a lot of questions from students. Thing is, my students already accept that penny stocks provide a massive opportunity. And they’re studying to learn the strategies and rules.
But there are a lot of misconceptions about penny stocks. And I want to address a few of those now…
Are Penny Stocks Dangerous?
For the uneducated — and those who stubbornly refuse to get educated — penny stocks can be dangerous. Which is exactly why you have to learn my patterns, rules, and strategies. I trade conservatively with a small account to focus on teaching.
If you’re willing to follow the rules and strategies I teach…and you’re willing to trade conservatively with small positions as you learn…then penny stocks don’t have to be dangerous.
That doesn’t mean you’ll never lose. I lose roughly 25% of the time and my winning percentage is exceptional. But you can be successful with a lower winning percentage. So a better question than whether penny stocks are dangerous is…
Are you willing to put in the time and effort to learn what you need to learn?
If Most Penny Stock Companies Fail, Why Not Just Short Sell?
Because it’s a very dangerous, overcrowded game right now. The level of risk so many moron newbie short sellers take these days is unconscionable. It’s completely crazy.
Of course, you can be successful as a short-seller. Many of my top students focus on short selling and I’ve personally made millions from short selling. But the number of messages I get almost daily from short-sellers getting caught in short squeezes is… scary to say the least.
How Much Money Do I Need to Get Started?
I’m going to say, again, invest in your education first. It doesn’t take a huge amount of money to get started trading. Different brokers have different account minimum requirements.
But the market will make you pay more if you aren’t prepared. Preparation is key. The stock market is a battlefield, so arm yourself accordingly. Keep in mind that my top students all studied hard over time to get consistently profitable. Tim Grittani — arguably the best penny stock trader in the world — didn’t make anything for nine months.
So before you fund a trading account, fund your knowledge account.
The Bottom Line
Your goal as a trader is to become self-sufficient. And my goal is to be the mentor to you that I never had. So I hope you’ll take this lesson on building a watchlist and use it as a learning tool.
Focus on the process. The best way to learn which penny stocks to watch is to make a daily watchlist yourself. Follow the five tips above. It doesn’t matter if every stock on your list is not perfect. Or doesn’t play out the way you thought. You get better by making your daily watchlist and then seeing what happened during the trading day.
Editor, Penny Stock Millionaires