These Tips for Trading Penny Stocks Are ‘Must Haves’ Right Now
Trading penny stocks in 2021 is not easy. With the pandemic still around, fears of long-term inflation, and the overall volatility of penny stocks, many investors are looking for the best small-caps to buy.
To do so, we have to consider what industries are heating up, and which corresponding penny stocks could benefit. The best trader will always be the ones with the most information at hand. And with the internet available, any trader can be just as informed as the pros.
In mid-2021, some aspects at play include the continuous rise of meme stocks such as AMC stock and others, as well as the sizable fluctuations with cryptocurrency and more. While social media has played a role in the stock market for some time, in the past year and a half, its role has grown exponentially. This means that the entire list of penny stocks is subject to massive intraday shifts that can only be found by scouring social media such as Reddit and Twitter.
This should not serve to incite fear, but rather to show that social media can be used to your advantage. Considering all of this, let’s take a look at what investors need to know about buying penny stocks in July and seven small caps to watch.
3 Need-to-Knows and 7 Penny Stocks to Watch
- Have a Trading Strategy
- Understand Current Penny Stocks Trends
- Which Industries Are Investors Watching?
- 7 Penny Stocks to Watch Right Now
Have a Trading Strategy
Having a trading strategy is one of the best things any investor can do. Not only is this important for knowing how to buy and sell penny stocks, but there is one reason in particular why strategies are so useful. That is, consistency. Many traders get caught up with the idea of FOMO (fear of missing out). And, 99% of the time, this will lead to major losses. If you’re unfamiliar, let’s give an example.
Say a stock shoots up 50% in a day, you might say, well I want to buy to try and catch some of the momentum. By the time you buy in, most investors are already selling, leading to a large selloff and major losses. This is not to say that there aren’t buy-in points along the way to the top, however, feeling like you’re going to miss out on gains will always be a detriment to profits. To avoid this, top investors have a concrete strategy and they stick with it. This could be a strategy for knowing how to buy stocks, how to sell stocks, what to look for in a company, or how to take profit.
When learning to trade penny stocks, it can be difficult to land on a strategy that works best for you. However, the best way to start is by understanding your goals. If you’re looking for a long-term investment, certain penny stocks may be better suited to your portfolio, and vise versa. But, at the end of the day, sticking by your own investment rules will guarantee a level of consistency in your portfolio.
Understanding Current Penny Stock Trends
Currently, there are several things at play with penny stocks. Starting from the top we have the pandemic, and the most recent iteration, the Delta variant. While vaccines are still highly efficacious against this variant, the more transmissible nature means we could see select pockets of Covid resurgence in areas with low vaccine rates. This is putting a major emphasis on two distinct markets for penny stocks.
On one hand, we have the focus on biotech penny stocks. This includes those working on a Covid treatment and those not doing so. This has been consistent over the past year and a half, but it continues to be a pervasive trend. On the other hand, we have a focus on safeguard stocks, such as mining penny stocks, gold stocks, and certain energy companies.
This is often the case when geopolitical or other factors impact the market. Investors will move toward safer options to try and hedge bets against volatility with other holdings. So, for this reason, it’s important to understand what a prospective penny stock to watch does, and whether it has a role in Covid or not. This will help to show if it could continue to post gains, or if it will have high exposure to the current volatility of the stock market overall.
Which Industries Are Investors Watching?
As stated earlier, some of the industries that penny stocks investors are watching right now include biotech and mining stocks. However, another industry that is seeing a resurgence right now is cryptocurrency and blockchain penny stocks. With the rise of cryptos like Bitcoin and DogeCoin once again, many investors believe in a strong future for crypto.
Although investing in the coins themselves is a great way to see returns from the blockchain industry, many choose to find penny stocks that work in the blockchain industry. These could be companies that supply bitcoin mining machines, those that are producing blockchain technology, and many more. As you can see, the market is quite broad, and for that reason, it can seem difficult to pick just one or two stocks to watch.
The best way to break this down is to consider your risk tolerance and the relation to exposure to the crypto market. The more exposed a company is to the ups and downs of crypto, the higher the likelihood of it being quite volatile and vise versa. So, understanding what type of investor you are and what your portfolio goals are, will both help to align your holdings with a realistic goal. While cryptocurrency penny stocks are not the only industry that investors are watching, it is one that is gaining traction once again. Considering this, which industries are you watching right now?
7 Penny Stocks to Watch Right Now
- SeaChange International Inc. (NASDAQ: SEAC)
- Uranium Energy Corp. (NYSE: UEC)
- Ur-Energy Inc. (NYSE: URG)
- Seanergy Maritime Holdings Corp. (NASDAQ: SHIP)
- Palatin Technologies Inc. (NYSE: PTN)
- Transocean Ltd. (NYSE: RIG)
- Phunware Inc. (NASDAQ: PHUN)
What Penny Stocks Are You Trading Right Now?
Trading penny stocks in 2021 is all about understanding where the market could be headed. Because there are so many external and extraordinary factors at play, finding the best penny stocks to buy can be challenging.
However, if you do the proper research, and understand what factors will affect certain penny stocks, making a profit can be much easier than previously imagined. All things considered, what penny stocks are you trading right now?