If you are going to engage in day trading penny stocks then you are going to have to experiment a little to determine what style you like best. There are many different ways to conduct day trading. Each person has a particular indicator that they like to use and you need to determine what your strategy is going to be.

Day trading penny stocks is not for the faint of heart or for the undisciplined. You need to make sure of the answer to many important questions to determine if it is for you. Do you have a strategy and will you have the discipline to stick with it? Do you have the money in your account to day trade penny stocks? Can you handle the mental pressure that day trading brings? What will you do if something goes wrong? Do you have time to do the research necessary and can you stay with your strategy long enough till it proves fruitful for you.

Day trading will increase you mental stress and will at the same time rack up the commissions. But if you can learn to be disciplined then this type of trading can be profitable. However, many will burn out long before they experience the benefits of day trading.

If you are going to engage in penny stock day trading then you will need to learn to ready charts. This is the key to being successful. You will need to know how to spot various chart patterns with ease. You will also need to be familiar with the use of moving averages, support and resistance lines, trend lines and any technical indicator that you might use to help make your trading decisions such as MACD, stochastics, etc. So I recommend that you first become familiar with all of these trading patterns before even beginning to consider day trading penny stocks. You will also need to notice the change in volume that occurs for each bar that you are watching.

In order to start day trading you need to also determine which time frame you are going to use. Are you going to look at one minute bars, five minute bars, etc. You should also make sure that the longer term trend is favorable before making a day trade. By this I mean, if you are going to trade the five minute bars then you should make sure that the 15 or 30 minute bars are also favorable to your new position. If the trends do not line up then you might want to wait until the trends do line up.

If you are not comfortable with the high paced world of day trading penny stocks and don’t want to be chained to your computer all day then you may want to consider swing trading penny stocks instead. The time frames on these trades will be from one day to potentially a few weeks. You will be looking for larger overall trends and will also be looking for larger profits.

Day trading penny stocks requires you to make many trades where you hope to clear a small profit on each trade. You make up for the small profits with the volume of trades. Swing trading looks to make a larger profit on much fewer trades.

You will need to decide which type of trading system that you feel most comfortable with and which one that you feel you could be more successful with.