Do you know where to find penny stocks? The best way to find them is to use a good day trading scanner like Trade Ideas or Finviz. Set your scanning filters to hunt for stocks gapping up at least 4% in the premarket. If the market is open, ensure your HOD (high of day) scanner is running. Using a good breaking news resource like Benzinga is helpful as well.
Day Trading Course
Table of Contents
Where to Find Penny Stocks to Trade
- Here’s how to find penny stocks to trade:
- Use a good stock scanner like Trade Ideas, Finviz, or Black Box Stocks
- Scan the premarket for stocks that have high volume
- Look for at least 100,000 premarket volume
- Compare volume with high relative volume (RVOL)
- Scan the market at open for high-of-day momentum plays
- Know the differences between OTC/Pink Sheets and Nasdaq penny stocks
- We also update our penny stocks watch list daily
- Alert setups are included for members
- Also, check out our lists of the most popular penny stock sectors
Penny stock trading is an attractive sector to many people, especially new traders. The goal is to take that small amount and grow it. Penny stocks are cheap and promise large profits with little capital. What makes a penny stock a penny stock?
It’s any stock that trades under $5. The majority trade under a $1. Hence, the name penny stocks. Penny stocks are very risky because they’re not regulated.
Learn how to manage your risk because you can make a profit. However, you can also really hurt yourself trading this sector.
Strategies
To use penny stock trading strategies, you need to know where to find penny stocks. However, it’s important to know that this sector usually has large bid/ask spreads, making it hard to get out of a trade. There isn’t a lot of liquidity, making it hard to exit a trade.
Finding penny stocks can be difficult. It would be best if you always researched the companies for yourself. Never take someone at their word in this sector. It’s rife with manipulators and pumpers. Doing your research greatly adds to your chance of success. The stocks from $1 to $5 will typically be traded on major exchanges such as the NASDAQ.
The major stock exchanges have listing requirements. If the stock’s listing price is under $1, they’re usually delisted. When you can’t find penny stocks on major exchanges, they trade over-the-counter (OTC) or pink sheets.
Over-the-counter stocks are slightly more legitimate because they have some listing requirements. However, the pink sheets don’t. They’re not registered with the SEC, so they’re much more risky.
COURSE |  |  |  |
|---|---|---|---|
| DESCRIPTION | Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action | Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading | How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading |
| INCLUDED | Daily watch lists • Trade rooms • Trading scanners • Discord • Live streaming Day Trading > | Daily watch lists • Trade rooms • Options scanners • Discord • Live streaming Options > | Futures target levels • Trade rooms • Real time teaching • Discord • Live streaming Futures > |
The Internet
Do you want to know where to find penny stocks? The internet. Some websites have lists of legitimate penny stocks online. With that being said, make sure it’s not a scam.
That may be the biggest issue with penny stock trading. It’s also how manipulators get you. You can sign up for newsletters and emails, but that’s where they get you.
Since most penny stocks are pink slips and OTC, they’re not traded on the major stock market exchanges. This means once you’ve found penny stocks you’re interested in, you must research each company.
You may have to look at many websites while doing your due diligence. It will take time and effort, but you’ll get faster at it over time.
Avoid the Scam
When you come across a penny stock, whether online or in a recommended, consider it a scam until you research. Did you know that promoters get paid to get you to buy a stock? Remember that when finding out where to find penny stocks.
It’s more probable that they don’t own that stock. Instead, they’re being paid to get you to buy shares. Look into the company. Look at their financials, their management, and their debt.
This information may be hard to find. However, the more you can find, the better it is for you. Look to see where the stocks are traded. Any penny stock not traded on the major exchanges is open to price manipulation.
Verify the claims of people promising huge upswings in price. Usually, they have a reason, such as a drug approval or something in their company going public. The news is bait. It’s how they suck you in.
Back up any claims from legitimate sources. Always be skeptical. It’s how you survive. If something is too good to be true, it usually is. You’re not going to get rich quick. It takes hard work and practice.
Best Trading Tools
How to Tell if a Penny Stock Is a Pump and Dump?
It’s not hard to tell if a penny stock is a pump and dump because most penny stocks under 20 million float are pump and dumps. Watch for news catalysts, high relative volume, and then the pump. When price action gets overextended, be aware of the head and shoulders pattern that dumps price action. These are typically gapping stocks that pop in the premarket but dump at the open.
Charts Don’t Lie
Once you’ve verified information on where to find penny stocks, look at the charts of any stock you’re interested in. The patterns and technical indicators are going to give confirmation.
The importance of patterns gives you a better understanding of where to enter and exit a trade. Cup and handle patterns and head and shoulders patterns will have you make different trades.
Do you know what tweezer top patterns or bearish harami patterns mean? You must know these patterns, what they look like, and what it means to be a good trader.
Knowing if a stock has a bullish or bearish bias will change how you trade. A stock that’s going bearish might have you sitting out or shorting.
If a stock is at resistance, then wait for a pullback. Buying the dip and selling the rip is a good rule of thumb for penny stock trading. Look at the moving averages, RSI, and MACD.
All of these tools are available to help you. Take our day trading course to learn more about using the technical indicators for proper risk management.
Final Thoughts: Where to Find Good Penny Stocks?
You can make money on the pump when you know where to find penny stocks. Don’t fall in love with or get attached to a penny stock. Instead, profit on the pumps and get out before the dumps. Hence, there is a need for technical indicators and patterns.
If you need more help, take our day trading course.
