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Holding penny stocks overnight. How it could be a winner if selecting the right one

Recently I have been thinking to myself that I need to get back into penny stocks. The upside movements to be made have been killer. For the last 3 years I have been really studying the way penny stocks move and you best believe they are risky as heck but they also yield the greatest rewards. So what’s the catch? Well, there is t really any catch however market makers really do manipulate the prices in different ways then the /ES E-mini market makers do. The longer you trade, the better the feel of the price action flow you will get. The key to making profits in the market is to enter at the right time because you feel the market. To be one with the market is the best feelings in the world. Traders trade the exact same way day in and day out. Why is it that most traders fail? I strongly believe it’s because they over trade. They don’t necessarily over trade because they are degenerate gamblers like Tim Sykes says, however they tend to do this because they don’t know which trades to take. Which are the lower risk, higher reward trades.  

For a penny stock to move, it has to have a reason. You have to know the reason why it’s moving. Penny stocks don’t just run because buyers like you and I decided to get in. Things to study, which I will talk about later are:

1. Shares float

2. Float rotation

3. Short Squeezes

4. Holding overnight

5. Pump and dumps

6. Ending strong with a catalyst

7. Gap up

8. Gap down

9. Gap fill

10. Increased volume

11. Time of day

12. Pumpers

13. Sort sale restriction

14. Shares to short

15. Bid and ask

16. Level 2 manipulation

And the list goes on. In order to really make money with penny stocks, you need to understand all these and more. You need to be able to scan for stocks that are moving and know when a trade is a good trade. 

Today I was long $ASNA overnight and was looking for a solid gap up. My reasoning for holding this long overnight was because the short float on this stock is ridiculous. So many shorts. It gapped down and was at the point where we can have a gap fill. The volume was there and it closed solid into the close. Not only all that but the company reported earnings and although earnings were shit, like expected, the stock still decided to spike. All these aligned. 

It didn’t spike as high as I liked it to so I took my profits earlier than anticipated and looked for another trade. Subscribe to my newsletter to learn more and get more insight on how we trades.

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