12 Basic Rules of Penny Stock Swing Trading

Many penny stock traders enjoy the idea of swing trading. This allows you to buy and follow the trend without watching through the day. These penny stock plays are normally three to five day plays sometimes longer. I have found through penny stock trading my top 12 rules for swing trading.

1. If the trade moves in your favor, carry it overnight--the odds favor follow-through. Expect to exit the next day around the objective point. An overnight gap presents an excellent opportunity to take profits. Concentrating on only one entry or one exit per day relieves the pressure. 2. If your entry is correct, the market should move favorably almost immediately. It may come back to test and/or exceed your entry point a little, but that's OK. 3. Do not carry a losing position overnight. Exit and play for better position the next day. 4. A strong close indicates a strong opening the following day. 5. If the market doesn't perform as expected, exit on the first reaction. 6. If the market offers you a windfall of big profits, take them to the bank on the close. 7. If you are long and the market closes flat, indicating a lower opening the following day, scratch or exit the trade. Play for better position the next day. 8. It is always OK to scratch a trade! 9. Use tight stops when swing trading (wider stops when trading trend). 10. The goal always is to minimize risk and create "Freebies." 11. When in doubt--get out! You have lost your road map and your game plan! 12. When the trade isn't working, exit on the first reaction.

Article was written by Mouser57 member of stockhideout.com Hot Penny Stocks

Mouser57 member of stockhideout.com Penny Stocks, and stock message board