Penny stocks are stocks that are valued at less than $5, according to the U.S. Securities and Exchange Commission. Because there is a lower cost to buy, penny stocks can be a good way to try your hand at trading before investing in stocks that are more expensive. Penny stocks can be considered risky because it is harder to get a large payout from them even when they do well, and because there is not much information available to the general public on the background of each stock. However, they also have the opportunity to quickly grow and give the owner a large gain in a short amount of time.
To gain the most money for your dollar and pennies, you may be wondering: When are the best times to trade penny stocks?
Mondays
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One of the best days to buy stocks is Mondays. Stocks are typically lower on Mondays; this is because there is usually bad news released over the weekend, which causes stocks to fall. If you buy when the price is low, you will have the opportunity to make more money in the long run. Conversely, one of the best times to sell stocks is on Fridays.
Summer
One of the best times to trade stocks is during the summer. Many traders get high returns during the summer, especially in July. If you are looking for a time to begin trading penny stocks, summer may be a good bet. Of all the seasons, this is the one that will give you the most likely chance of turning a profit. If summer is too far away, another good time to invest in penny stocks is at the turn of the new year, in January.
Middle of the Day
One of the best times to trade stocks for beginners is during the middle of the day when the market is less volatile. The market is more stable at this time because traders are waiting for more news that may affect the market before the end of the day. If you are a more seasoned trader, there are opportunities to make money at the beginning of the day, but this may be riskier if you are someone who is just trying to gain experience in the market.
If you are ready to invest in penny stocks, it is best to invest in an industry that you are familiar with and have knowledge. Since you will be more likely to know about upcoming trends and big news in that industry, you will know which companies it will be good to invest in. You should buy penny stocks from a reliable source (because it is easy to manipulate and render them fraudulent). If you would like to ensure that you are buying a trustworthy stock, you should use a stock screener, which most websites provide for free. Now that you know which times may be good for investing in penny stocks, go ahead and try it out yourself!
