Having a NASDAQ penny stock list should be in every traders arsenal since moves on penny stocks can be extreme and volatile with 1000% gains not uncommon. First we must define what we’re talking about when we say penny stock. For the purposes of this post, a penny stock is define at any stock trading below $5 and on the NASDAQ Small Cap Exchange.
When compiling a NASDAQ penny stock list, we must first do our scans for stocks within the price range in which we are comfortable. Some penny stock traders will not have the risk tolerance for penny stocks trading in the $4-$5 range. The problem with penny stocks that trade below $4 or so, is that many big board traders won’t consider trading them, in fact, some traders won’t even look at a stock trading below $20. Which is a shame since these stocks can have powerful moves should a news event related to earnings or a new contract signed with another company.
Back to scanning for potential stocks to place on our NASDAQ penny stock list. Once we choose the price range, we next should consider liquidity. How many shares are traded daily in the penny stock we are considering? 100,000 shares a day is a good figure since this shows there is sufficient interest in the stock with some movement in the stock each day. We need to narrow our NASDAQ penny stock list to under about 50 stocks, since maintaining a list over 50 becomes work intensive and many traders do their research after market hours. Like anyone else, a penny stock trader has obligations outside of trading and researching more than 50 stocks a day is not tenable unless of course the trader has no life.
Once we have compiled out NASDAQ penny stock list, we will begin doing our due diligence on the stock we have chosen. Plus, due diligence will help the penny stock trader determine which stocks are likely to make gains over the short term. 1000 Penny Stocks primarily looks at stocks from the technical side using charts and other indicators, but when compiling a list, fundamentals should also be considered. Technicals will help with entry and selling points based on support and resistance, fundamentals however will help in making the decision whether to consider the stock in the first place.
Having a NASDAQ penny stock list with a core of potential penny stocks that may appreciate with gains of 1000% percent or more is possible. But due diligence is the most important factor and before choosing a penny stock to add to your portfolio, time spent watching the stock trade daily is also vitally important.
Penny stocks are for the speculator and money that can be risked without serious financial injury to the trader should be the only money used. Finding good scanning software is very important and a free site such as prophet. Net is viable option for people just getting started. A NASDAQ penny stock list should be considered if you have a knack for the excitement and volatility of the wild wild west of the stock market.