Using Stochastics To Trade Penny Stocks

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Using stochastics is an easy way to trade penny stocks for those who are struggling to find a way to trade them successfully. Obviously, they are not foolproof because …. well, nothing is foolproof. You will never find a tool that will work 100%. If this is what you are looking for, you will be seriously disappointed.

But when it comes to stochastics, you can find this indicator on almost every chart package provided by stock brokers. If they don't, you can find many free online tools in which you can use this flag.

Stochastic operation is really simple. You can either trade when the two stochastic lines cross or when they are in the oversold or overbought area. However, I exchange them personally when the two situations are in play.

So if I see the two stochastic lines under 20 and I'm about to cross up, now is a good time to buy. If the two lines are around 80 and are about to cross down, now is a good time to sell.

Using this strategy should allow you to get a winning percentage of 65 to 70%, which could even reach 80% if you apply other factors.

For example, if you learn some price action techniques to use stochastics, you could be a full-time trader. Learn how to use trendlines, support and resistance, Fibonacci, etc.

There is really no "one way" to trade penny stocks. You just have to find what works best for you.


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