What Are High Volume Penny Stocks?
You don’t have to be extremely wealthy to start investing. Penny stocks are those that trade for under $5 a share on the stock market, though the stock price may even frequently be as low as $1 per share.
Most often, though, if you want to take advantage of these low share prices, you’ll be trading outside the major market exchanges in what’s known as the over-the-counter market or OTC bulletin board. There may be other OTC markets outside of the stock exchange that small companies use as well.
Before you can understand what a high-volume penny stock is, you must first understand what high volume means.
A penny stock’s volume is the number of shares traded in the market on a given day. That means high-volume stocks are frequently traded in real-time over the course of a day on the market.
That said, just because it’s a high-volume penny stock, it doesn’t necessarily mean it’s a wise investment.
It simply increases the chance that you’ll be able to sell it when you want to. Low volume penny, conversely, stocks are more difficult to sell and are more likely to see erratic price changes.
In this article, we’ll show you how to find high-volume penny stocks, give you a list of high-volume penny stocks worth watching, and show you some mistakes to avoid as you delve into this style of investing.
How to Find High Volume Penny Stocks
The easiest way to find high-volume penny stocks is to use a stock screener or scanner. These are tools that find stocks that match specific criteria that you set. If you choose not to use a stock scanner, you’ll be left scouring the markets for prices and companies that fit your needs, and that takes a lot of time and effort. You’d have to search the NYSE, NASDAQ, and AMEX manually without using a tool.
Stock screeners look for stocks that meet the criteria you put into the tool and spit out a list of possible investments you could make. You’ll end up with a watchlist that contains nothing but stocks in industries and fields you’re interested in.
You can narrow down the list by a variety of technical indicators such as:
- Market cap
- Stock price
- Price to Earnings ratio
- Price situation or share activity (trading volume or volatility)
- Company size
- Profit margin
A couple of the most popular stock screeners are:
- Yahoo: Yahoo’s stock screener is an easy-to-use and intuitive tool. This free screener has a decent range of parameters. It’s easy enough for beginners who want something they can trust while they’re learning and growing.
- Finviz: If you’re willing to pay, you can get a more updated version of the free stock screener they offer. If you like the idea of swing trading or holding on to a stock for a few days (or weeks) to make a gain, Finviz is a good screener tool for you.
High Volume Penny Stock Watch List
Okay, so you’re ready to look at the top penny stocks that may be worth trading, right? Here is a list of breakout penny stocks worth watching. Please note that they are in no particular order and are not to be construed as official investment advice.
- Regen BioPharma, Inc. (OTCMKTS: RGBP): A biotech company focused on immunology and immunotherapy. Founded in 2012 and headquartered in La Mesa, CA. At the time of publication, this stock last traded at $0.024 per share.
- 88 Energy Limited (OTCMKTS: EEENF): This is an Australian oil and gas exploration company. They focus on developing mineral properties. At the time of publication, this stock last traded at $0.015.
- Discovery Minerals Ltd. (OTCMKTS: DSCR): This company buys and develops other companies in the natural resource space. They are working with other companies to develop interests in gold mining. At the time of publication, this stock last traded at $0.018.
- InnerScope Hearing Technologies, Inc. (OTCMKTS: INND): This company has B2B software as a service patient management system software solution to help healthcare facilities improve operations and patent communication. At the time of publication, this stock last traded at $0.03.
- Life Clips, Inc. (OTCMKTS: LCLP): Life Clips, Inc. develops, manufactures, and sells cameras and batteries in the United States. They are known for their body cameras and software solutions for law enforcement. At the time of publication, this stock last traded at $0.0053.
- Remote Dynamics, Inc. (OTCMKTS: RMTD): Remote Dynamics, Inc. is a software company out of Plano, TX. They offer software for real-time asset tracking, billing and security monitoring, and maintenance management for service, construction, and equipment rental companies. At the time of publication, this last traded at $0.00050.
- Somatic Systems, Inc. (OTCMKTS: SMAS): Based in Northampton, MA, the company is the worldwide center for Clinical Somatics, which is a non-surgical, drug-free approach to pain. At the time of publication, this stock last traded at $0.00030.
- MultiCell Technologies, Inc. (OTCMKTS: MCET): This is a clinical-stage biotechnology company. They focus on novel therapeutics specifically for hepatic disease, cancer, and neurological disorders. At the time of publication, it last traded at $0.0021.
Penny Stock Trading Mistakes to Avoid
Because of how inexpensive and accessible they are, penny stocks particularly incite a lot of interest and excitement. It’s okay to be excited and want to get started investing right away. But if you do it too quickly, you may end up costing yourself time and money.
When getting into the investing game, look out for these common mistakes.
Trading without a pattern
You need a trading pattern to know which factors to consider when you calculate where to enter a market, set your stop-loss orders, and where to set your target profits. Familiarize yourself with chart patterns before you start investing a lot of money.
Trading on a whim (without an edge)
You should never just trade on a whim because the stocks are cheap. Buying stocks randomly based on rumor or their small price tag won’t really get you anywhere. It can cause you to lose money unnecessarily. Pay attention to things like average volume, daily volume, microcap, etc.
Trading without a plan
Always have an idea of how long you’ll hold on to the stock. You should know whether you want to go long term or short term. You should also know your price targets, how much money you’re willing to risk, and at what point the trade may not work in your favor. You should not make the trade without knowing your entry and exit points.
Trading without a stop loss
If you don’t set a stop loss as soon as your trade is filled, you could lose a lot of money. If a stock loses support and everyone wants to get out quickly, it can fall much faster than you can set up your sell order. When your stop loss is set as soon as your trade is filled, you’re better protected if something happens while you don’t have your eyes on the computer screen.
Trading without limitations (over-trading)
Over-trading can get you in a bind, especially if you’re buying more stock before the sale of your previous stocks has gone through. Make sure you set reasonable limitations and don’t fall into the trap of over-trading your penny stocks.
Get All the Updates with WALLSTNOW
Well, there you have it—an overview of high volume penny stock trading. These are not ideal for long-term investments but are perfect for day trading or swing trading where there’s plenty of liquidity so you can sell quickly.
Trading penny stocks successfully requires knowledge of a number of trading strategies. If you want to get started without the pressure of choosing your investments, consider an ETF, where brokers invest for you and you share the risk with others who invest in the same ETF.
Whether you want to trade penny stocks right now, or you’re still watching and learning, WALLSTNOW can help.
Disclaimer: All investments involve the risk of loss. Nothing on this website should be misconstrued as investment advice. Any reference to an investment’s historical or projected performance is not a recommendation or guarantee of profit or desired outcome.