3 Must-Know Strategies For Buying Penny Stocks in September
Buying penny stocks right now is unlike any other time in the past few years. While investors are more or less used to the pandemic and its effects on the market, there are several other factors that traders need to take into consideration. The first is the ability to find trending penny stocks. One of the most trending penny stocks of the past few weeks has been Support.com (NASDAQ: SPRT).
On Friday, August 27th, shares of SPRT stock shot up by over 160% to north of $50. This represents a five-day gain of over 450%, a one-month gain of over 640%, and a six-month gain of over 2,260%. And just like that, SPRT stock entered into the meme stock atmosphere. But, what we see here is a clear example of both how volatile the stock market is in 2021, and how eager investors are to find the next most trending stock.
It’s worth noting that SPRT was a penny stock only a few weeks ago, which illustrates that all penny stocks could have potential. But, being able to weed out the winners from the losers, takes time and experience. And with a new month upon us, the symbolic shift of a clean slate could help to bring about a bullish turn. So for this reason, let’s go over some of the ins and outs of investing in penny stocks in September.
Investing in Penny Stocks Basics in September 2021
- Finding Trending Penny Stocks
- Knowing When to Buy and Sell
- Understanding Penny Stocks in 2021
Finding Trending Penny Stocks
When it comes to finding trending penny stocks, there are a few places that investors can look. One of the most popular areas right now is Reddit. On Reddit, there are hundreds of communities dedicated to trading penny stocks and blue chips. And as a result, stocks are frequently mentioned that investors can take advantage of.
It’s worth noting that penny stocks on Reddit can be highly volatile. However, this high volatility is something that investors can take advantage of. With trending penny stocks, it’s important to stay as up-to-date as possible, understanding what makes the stock move, and what could make it move in the near future.
Because penny stocks are highly speculative, even the smallest announcement can result in large spikes. When searching Reddit, there are what’s known as Subreddits. These are the communities that investors can look at to find popular stocks to buy. This includes Subreddits such as r/WallStreetBets and r/RedditPennyStocks among others.
Once you’ve compiled a list, it’s extremely important to understand everything you can about the company in question. This means researching its financials, what it does, and any events coming up that could impact it. But all in all, finding trending penny stocks can be a valuable method in 2021.
Knowing When to Buy and Sell
While making money with penny stocks can seem easy, the real trick comes when it’s time to buy and sell. Many investors will hold on to a stock, hoping for a ceiling that never occurs. And this greed often results in sizable losses. One of the best pieces of advice is to never trade with emotion or FOMO. This is something that all pro traders will tell you, and these are words to live by. On one hand, trading without emotion means that you can stick to your strategy and bring in consistent gains. And, a strategy should always involve a researched method that aligns with your investing style.
In addition to this, many investors get caught up in FOMO or the fear of missing out. For example, let’s say a stock like SPRT shoots up over 100% as it did on August 27th, many investors would try to invest despite it being too late to make a profit. The stock would then pull back, resulting in swift losses. So to avoid this, always stick to your strategy, and only invest what you are willing to lose. This is not to say that all investments will be a loss because that would defeat the point.
However, investing in both penny stocks and blue chips can be risky. Understanding when to buy and sell will always be up to your individual strategy. Some investors are in it for the long game, while others are more geared at short-term or swing trading. Both of these strategies are equally valid, but again, it is completely up to you and your portfolio goals. So in short, make a strategy, never trade with emotion, and always have a plan to enter and exit trades.
Understanding Penny Stocks in 2021
Understanding penny stocks in 2021 is all about considering what’s going on in the market. The most prominent factor impacting stocks right now is Covid. And while investors have dealt with this for over a year and a half, the situation continues to change regularly.
With Covid in focus, many traders have turned to certain industries that can benefit. These industries include those that could benefit from the current situation as well as those that may benefit as Covid comes to an end.
On one hand, those benefitting right now include tech stocks, entertainment stocks, biotech stocks, and more. And on the other hand, those that could benefit as Covid ends, also known as reopening penny stocks, include similar industries but also travel, retail and more. For this, it’s important to think outside of the box and consider how the pandemic could continue to affect stocks.
With the right mindset, it can be easy to find potential winning penny stocks to buy. However, given that there are so many unknowns right now, it can be complicated to deduce which may be worth it. But with proper research and the utilization of your trading strategy, it can be much easier than previously anticipated.
3 Penny Stocks to Watch Right Now
- Chembio Diagnostics Inc. (NASDAQ: CEMI)
- Exela Technologies Inc. (NASDAQ: XELA)
- Sphere 3D Corp. (NASDAQ: ANY)
Are Penny Stocks Worth it in September 2021?
The short answer to this question is that it all comes down to you and your individual trading strategy. While some investors may invest in penny stocks for their short-term potential, others are looking for long-term winners.
With stocks under $5, volatility is usually quite high, and that is something to consider. But, at the end of the day, there are plenty of opportunities with penny stocks. However, it all comes down to knowing where to look and having the right tools at your disposal. So, what do you think? Are penny stocks worth it in September 2021?