Penny stock trading is no different than other stock trading. Every trader needs a strategy that they follow in order to be successful. Stock trading without a plan is a sure fire way to experience failure. The same is true of penny stock trading. The right penny stock strategy can make or break your trading.

The first part of any penny stock strategy needs to be money management. How much money are you going to commit to any particular trade? Will you establish a full position when you enter a trade or will you only establish a partial position? These are important questions to answer up front because it will determine what your next move is. If you are entering a full position each time you enter a trade you will immediately have to set where you are going to exit the stock should it move against you. If you are only entering a partial position you may be expecting the stop to drop further and you will have to know when you will enter the rest of your position.

You will need to have a strategy for entering your penny stock trade. What trigger will cause you to enter a trade? Every trader is different. You need to determine what is most familiar and comfortable for you. If you are a trader you are most likely not entering stock trades on the basis of fundamentals alone. Fundamentals are primarily for investors who are more long term. I am not a long term trader. I would be considered a swing trader. Now you may use fundamentals to narrow down your potential penny stock trading list but you are most likely not using the fundamental of the company to trigger your trade.

Most traders trade on the basis of technical analysis. Which technical analysis indicator you use is really a matter of personal preference. I know that this may not be exactly what you are looking for but I am of the opinion that virtually any technical indicator will work. If you are looking for the magic indicator or the one trigger that will bring your thousands then you have come to the wrong place. Any indicator will do. The magic is in your strategy or trading rules and whether or not your have the discipline to execute your strategy and follow your rules.

Discipline is the number one skill that will determine if you are successful or if you fail. You can be successful. I have no doubt about that if you can control your emotions. You will need to control the two emotions of fear and greed is you are going to be able to execute your penny stock strategy.