DAY TRADING vs. SWING TRADING
A lot of people get caught up in the idea that because these stocks can be really cheap, they can make money with them. But fact is these are difficult stocks to day trade. Unless you can get in on the morning rush and buy on the way up and sell on the way up, you will find it best to swing your trade over the course of a week or more. Sure, it is possible to buy and sell the same day. Some of these stocks will get caught up by the masses and run in volitile swings for 3-5 days. But trying to time a top or bottom is an effort in futility. One can loose not only their money but can also loose their sanity.
We take the position of swing trading the stock. We like to buy after the first run up has sold off and then depending on the reason for the run up, take our postion. If the run up in stock price is because of a news release we wait to see what the news was about. If the press release says the company has aquired property or has drilling results or good assays from drill results, each announcement will effect the stock price. In most cases the drilling of the property in question is of course surrounded by peoprty that is owned by other junior miners. It is a good theory to check on their price action also. This is a gmae like any other where everyone is watching the next guy. All these miners have their ear to ground. If you follow a stock long enough and know the story, you can sense how the stock will react to news. This plays well for those who swing trade their positions. Take a look at some historical charts that show opportune entry points
One thing that many have difficulty dealing with is press releases. Like any industry, whether it be tech, agriculture or anything in between, mining and exploration has their own lingo. Terms and terminlogy, values, abbreviations etc. are used in press releases. One has to learn what values are good, great, lousy, etc. It doesn't take long though. A press release to you may sound great. They found gold. But the stock sells off like crazy. Obviously 2 things come into play.
- The results were bad or not satisfactory to the some of the shareholders or...
- The results weren't that bad after all. Market makers or larger holders dump the stock just to clean out some shares from the folks who may run scared and sell out. This enables the pros to grab a few more shares cheaply before the next run up.
| STOCKS THAT MADE FORTUNES |
Interested in seeing just what some of these penny mining stocks can do? Check out our page of historical charts and information of real hot past performers.
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Because so few exploration companies actually will see their property go into a mine of any kind, the buy and hold strategy doesn't really work here. Most properties will get tons of dollars spent on being explored but very few claims will see a mine. There are however those penny miners like Diamond Fields that was looking for diamonds and instead stumbled onto Voisey Bay. Having shares in a stock like that from the beginning is just shear luck so that is why we wait out till something sparks interest in the investing public. Right now there is press releases almost daily about some penny miner finding something.
Technical Analysis
We see the term technical analysis used a lot. What is it? Well it's the analyzing of charts, data and other information. When working with large cap stocks that have developed trends of trading over a certain time period, you can see the highs and lows and go back over time and see that at certain times of the year the stock does certain things. But with penny stocks, especially penny mining stocks the technical analyzing of the stock really does do much good until the stock becomes an active trader or has the public interest. One look at some of the historical charts we have will show that for a large percentage of time the stock did absolutely nothing. It wasn't until something happened that caused the stock to become active. For these very reasons we try not to hold onto a stock for any length of time.
Charting Software
Lately we've been putting together some really cool resources that
can help us with our trading. One of the first I wanted to let
you know about is a software program called SwingTracker.
This is one the most elegantly set up and easy to use software
applications I've ever seen for trading. It's loaded with features,
many of which the larger companies (such as E-Signal) charge
an arm and a leg for, and best of all you can try it for 30-days
absolutely FREE!
Find out more right here.
Aren't you sick of paying through the nose for real-time data feeds,
charts, and scanning? Aren't you sick of the 'hyped' promises from
overpriced software? I know we were.
Larry Swing, the creator of SwingTracker, makes no such promises.
He simply says " Hey, I've put this program together and my friends
love it. I'm not promising you the moon, what I am saying is this will
knock your socks off for the monthly price I'm asking, and to
prove it to you, I want you to try it for 30-days F.R.E.E"
Not bad, eh? we have to tell you, when we had the chance to review the
software, we were very impressed. It is totally professional and of the
highest quality. But don't just take our word. Go check it out, you
have nothing to lose:
Try it for FREE
All the best,
GAdams
webmaster
