A number of years ago back during the stock market craze of the late 1990′s and early 2000s day trading experienced quite an explosion. Day trading centers opened up all across the United States where traders gathered to try to find their fortunes. Unfortunately, many of these traders lost a lot of money if not all of their trading fund. It is not that day trading could not be done successfully; it can. However, most people do not have the discipline to pull it off. Today it is difficult to effectively day trade since the volatility is not as great as it was 10 – 15 years ago. However, if you are intent of day trading then I would investigate penny stock day trading.

Penny stock day trading can still be done because penny stocks still retain the volatility necessary to make it work. Day trading cannot be done in the absence of volatility. Therefore penny stocks are the perfect stocks for this type of trading. Penny stocks are able to make pretty big swings each and every day. It is not uncommon for them to swing 5% – 10% each day. It is also quite possible for them to swing as much as 20% – 50%. There are also penny stocks that have made more than 100% percent gains in a day.

The difficult thing when penny stock day trading is obviously picking the spot to enter the stock during the trading day. Often, the moves in penny stock trading occur at the beginning of the trading day. If you are intent on day trading then I would look for stocks that open up big or down big and then look for some sort of reversal bar or some indication that the stock may continue.

Either way you need to keep your stops close and be willing to take quick profits. I would not look for anything greater than 5% for the most part. You will on occasion make larger percentage profits but always looking for these profits may end up costing you money in the long run.

If the stock opens up or down big often there is a pullback or a rally in response to the initial move. This may provide you an entry point if the stock is going to continue to move in the initial direction of the open. If you enter the trade and it moves beyond the open I would probably place some sore of mental stop at the open. If it fails to hold this level there is a good chance for a reversal. I would then look to enter the trade in the other direction.

Penny stock day trading is difficult to do correctly. I believe it is much safer to do penny stock swing trading. But if you are intent on this type of trading then hopefully these ideas will be of help to you.