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7 Ways To Find Hot Penny Stocks To Buy

How to find penny stocks to buy

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Penny stocks are a very risky investment, and it can be hard to find the best penny stocks to buy. However, taking the necessary steps to identify opportunities in the stock market can allow you to make money trading cheap stocks every day.

In order to find the best penny stocks to buy, you need to research the companies that you are interested in and look for news about them. You also need to look at the financial statements of the companies to see if there are any fine details the market might’ve missed that could give you an edge.

Once you have found a few good penny stocks to buy, you need to monitor their price movements and watch for patterns. When you see a penny stock that is starting to move up, it might be a sign that momentum has come into the market to where you will add it to your watch list for further analysis.

Trading penny stocks can be a very profitable way to make money, but it is important to remember that it is also a very risky investment. You should only trade stocks with money that you can afford to lose. In this article, we discuss 7 ways to find the best penny stocks to buy to add to your watch list this year.

1. Look for Positive Penny Stock News

When looking for penny stocks to buy, it doesn’t hurt to seek out companies that have recently published positive news. You can find this information by doing a quick Google search or coming to PennyStocks.com and read up on the top trending stocks for the day. You can also find penny stock news on other major financial sites, your broker, or with a news screener. It’s important to understand that just because a stock has news, that doesn’t mean it’s the best to buy.

But having a catalyst in play can many times propel trading momentum. Another thing to keep in mind is that news can be fleeting. In many cases, premarket updates might spark early moves but once the stock market opens, it can turn into a massive profit-taking opportunity for anyone who previously bought the stock.

2. Check Penny Stock Forums and Social Media

Penny stock forums and social media can be great resources for finding sentiment about some of the hot penny stocks to buy. These sources typically provide sentiment-based information on penny stocks that are currently experiencing strong momentum. It’s useful when trying to track the “herd mentality” in the retail market. We saw many similar instances of this with meme stocks who’s massive breakouts originated from groups of traders discussing them on places like Reddit, Twitter, and stock market chat rooms.

[Read More] How to Find Penny Stocks That Are Worth Buying

One thing to note is that we’re still talking about “stuff you read online” and not everything is accurate or truthful. If you are using forums and social media to find stocks to add to your watch list, make sure you do your own research to decide if they’re the best penny stocks to buy and don’t just jump in head-first because someone with a fancy screen name said so.

3. Use Penny Stock Screening Tools

There are a number of penny stock screeners available online that can help you find hot penny stocks to buy. These tools allow you to filter stocks based on criteria such as price, volume, and market capitalization. PennyStocks.com writers also go further and try to identify other unique traits that can help identify “interest” penny stocks to watch. Here are a few examples:

4. Use A Reliable Penny Stockbroker

When buying penny stocks, it’s important to use a reliable stockbroker that has experience with this type of investment. This will ensure that you’re getting the best possible price and that your trades are executed quickly. Some of the top penny stock brokers include:

  • Etrade
  • TDAmeritrade
  • Charles Schwab
  • Webull
  • Fidelity
  • TradeStation

5. Set Up Penny Stock Alerts

There are a number of websites and services that offer penny stock alerts. These alerts can be sent to your email or phone, and they’ll notify you when a penny stock reaches a certain price point. You can also set up penny stock alerts referencing plenty of other criteria as well. When there’s unusual volume, unusual options activity, large block purchase, dark pool trades, and even when certain technical indicators get crossed. All of these can be easily set up via your broker’s trading platform or using stock charts with the ability to overlay trends and set alerts.

6. Don’t Invest In Penny Stocks More Than You Can Afford to Lose

Penny stocks are very risky, so it’s important not to invest more money than you can afford to lose. Remember that penny stocks explode to extreme highs and implode to extreme lows, so always tread carefully when investing in this volatile market. Obviously, at the end of the day, it’s up to you to make the decision, but a good rule of thumb is sticking to the idea that if your investment went to zero, can you still manage daily life without an issue?

[Read More] Making Money With Penny Stocks When the Market Crashes

7. Have An Exit Strategy

Before buying penny stocks, it’s important to have a solid exit strategy in place. This will help you minimize losses if the stock price starts to drop. A common exit strategy is to set a stop-loss order, which will automatically sell your penny stock if it falls below a certain price. It will also give you a framework to stick to when it comes to peeling off profits along the way.

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By J. Samuel

As a trader and expert finance writer, I enjoy finding new and emerging trends that may have been overlooked by the average masses. If there's one thing that a trader or investor wants to know, it's how to use valuable data to their advantage. My expertise is in uncovering this data and compiling it into actionable information. As a professional finance writer, I've contributed to many of the top finance platforms and pride myself on researching factual, publicly available information and using that in all of my articles.

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