So we always like to talk about stocks that gained or can gain big. But we should not forget that trading is not the occupation where by doing more you will gain more. Let's talk about what we should avoid when trading nano & micro caps aka penny stocks.
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TEXT for readers:
Yesterday $HUNT was halted and the company now is talking with Nasdaq why it's stock price jumped 10 fold without any news. But the whole thing already smelled bad. And I actually warned people the day before that this stock is nice to watch but be aware while you will get trapped (
).https://twitter.com/microcaptraders/status/1110554414128005123
- microcaptraders
And guess what? Next day halted.
I hope you haven't chased this stock. But let's step back and look at what happened, why this stock is not the one you should be trading even the gains are so tempting for amateur traders to get involved?
So there no news and the stocks started flying. Nice gains! But the biggest warning comes from not having volume! Daily and the average volume was very weak in comparison to what you should expect from nano cap runner. Just compare $HUNT daily volume bars with this year's legend $BPTH. See the difference? Volume was there big time!
To rewind a bit we saw the same price action from $PHUN just three months ago. Very similar stock to avoid and do not even bother to trade.
So to finish here. If you want to day trade penny stocks big runners you must have volatility (big price increase) and VOLUME. Watch for these two doing magic on stock's price and you have more chances you have the winner to trade.
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