Hey this is Sasha DeKoven! Welcome to another episode of let's talk stocks in today's episode episode number 94. I'll be talking about trading penny stocks in the stock market. I will talk about some of the theory, the advantages and some of the risks that go along with trading penny stocks. I will spend about 30 to 40 minutes as usual on this lesson and I'll just try to condense and compress as much knowledge and information about penny stocks in that time frame. It's not going to give you everything about trading penny stocks in the world but it'll definitely give you some insights to trading some of the smaller companies on the penny stocks.
I do want to spend a little more time on penny stock specifically simply because I don't spend that much time on them and I know that there's a demand for that information and this video should open up your eyes a little more to some of the lower priced stocks. That's what we'll be talking about in this episode.
Just because it trades on the stock market or because it appears bigger doesn't make the company's valuable. It doesn't mean the company's making money. There are a lot of companies, if you look at business as a whole, most businesses, ninety-five percent of businesses as a whole fail within the first years. After three years about ninety-eight percent of businesses fail. That is just simply the nature of business. The companies that you're looking at right here even though they're on the stock market, that doesn't mean they can't fail and there have been some major companies that failed, even companies that were on the S&P 500, the Nasdaq and so. So it's important you be disciplined. Be aware that just because they're listed here doesn't mean it's going to work out properly.
You can make so much more money with penny stocks especially if you catch them at the right time looking for proper setups but sometimes this takes experience, a lot of practice looking at the charts ,looking at swing points and as you find nice charts and setups and you catch these explosive runs to the upside.
Once you get that, you're in it, you're in it for a little bit of a gain and then you're out. You're scalping. You're nibbling off of those trades. Start scanning looking for simple patterns. Don't make the patterns too complicated, just simple support and resistance with penny stocks is all you want and you're in it and then you're out. That's it. Very simple, look for a little bit of extra volume coming in and a little bit of volume in that stock on a trade because you want to also be able to get out of that trade.
Don't trade too large on penny stocks right away because if you do it might be difficult to get out of that position. Keep on watching for simple support and resistance levels. That's about the way that I would trade it because the more complicated you make it, the more confusing your strategy will get.