The Benefits Of Early Morning Buying

By Author: Katie Newman
Total Articles: 18
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The Benefits of Early Morning Buying
So you have an interest in Penny Stocks, it’s time for you to be let in on a little secret all smart penny stock traders share that has enabled them to be successful at trading penny stock for huge profits. There is a certain alliance among penny stock traders a certain “we are all in this game together to achieve the same goal, make money” mentality. We are all here to help each other. But how?
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First thing’s first… What is Momentum and how does it affect how a penny stock trades?
Momentum is when a stock’s share price accelerates in one direction. The idea behind momentum is that a stock is much more likely to continue in that direction than it is to reverse. But why? Well, when a stock gains momentum thousands of full-time traders are alerted through various market scanners. These traders then jump in to try and catch a piece of the momentum which only fuels the momentum even further, it’s a chain reaction. The key is to be in BEFORE the full-time traders notice what’s going on.
When momentum is created off the ...
... open, it greatly increases the chances of catching a winning trade as thousands of other traders not subscribed to my newsletter will try to play catch up. Meanwhile, members are already positioned nicely and can enjoy the ride. A phrase commonly used to describe this chain reaction is “buying begets buying.”
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Secondly, how do we as penny stock traders do this successfully?
Many Penny Stocks are thinly traded and can move quickly when there is an increase in volume. This means that momentum could build within just minutes from the opening bell going off. You don’t want to be the one buying the top of a move just when momentum is slowing down. So the best way to ensure that you catch the bulk of the momentum is to be involved before it starts to build. If momentum builds minutes after the opening bell, then you’d be sitting pretty if you got involved right when the market opened.
Being involved in a stock that is building momentum could be the best way to make money trading Penny Stocks. But you can’t dilly dally. Getting involved right at the opening bell in a penny stock that is gaining momentum could be your best chance of capitalizing on the opportunity. And since momentum builds rather quickly in many cases, it could be your best bet.
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