Many people would consider becoming a millionaire by day trading penny stocks to be the ultimate rags to riches story. By trading the cheapest stocks on the market, you can invest small amounts of money and see huge returns.
But how hard is to make a living day trading penny stocks? It’s a lot harder than most would imagine.
The allure of quick returns draws the crowds into the penny stock market, where many end up losing their shirts. At the end of the day, only 10% of active traders in the market will actually be profitable.
The rest are giving their money away to better traders.
After about 18 months of trial and error, I realized that there are a handful of stocks everyday that make big moves. The trick is learning to find those stocks BEFORE they make the big move.
That became the basis for the momentum day trading strategy that I’m trading today. I apply this to day trading penny stocks & small cap stocks.
Criteria for trading them: news catalyst , float under 100m and high relative volume.