Is Day Trading Penny Stocks For You? 3 Questions to Ask Yourself

Day trading penny stocks is not for every single trader in the market. Some traders enjoy the risks and opportunities associated with penny stock trading. Others prefer to play smaller, more consistent profits. It's important to understand the differences in between micro caps and the rest of the stock market. Penny stock trading is a great opportunity for building wealth and financial independence, but in order to figure out if it's right for you, I recommend asking yourself these simple questions.
First off, do you enjoy trading fast moving stocks? If so, day trading penny stocks is quite possibly the right avenue for you to take as a trader. Hot micro cap stocks will often make a move within a single day's time and will come up almost without warning, so you have to be ready to move and ready to take a swift profit from the markets! Traders who prefer to practice swing trading or position trading with longer term stock positions should avoid trading penny stocks and stick to more slow moving stocks.
Second, are you low on capital? If you are like a lot of traders starting out, the idea of trading is great, but you might only have a few hundred dollars available to trade with. This means you need to find cheap trades to pick, and micro caps are a great way around this problem. Since micro cap stocks only cost a fraction of standard mid and large cap stocks, they are an easy point of entry into the market and will get you a lot more from low startup than standard stocks.
Third, do you appreciate large gains in stocks with high potential risks? Typically, when it comes to day trading, the higher the risk, the higher the rewards. This is true when it comes to day trading micro cap stocks as much as anything else. So when you take a look at micro cap trading, you need to be aware that you are playing a delicate game with heavy profits available as a reward. If this makes you comfortable and you enjoy the idea of heavy profits with potential losses, then day trading penny stocks is quite likely for you!