Swing Trading Tips... Penny Stocks And Candlestick Charting

Most investors who use the internet, know about swing trading. If you are not a day trader or long term investor, you are a swing trader. It usually means you are holding on to a stock for at least a few days, but not more than a few weeks. Swing trading is traditionally considered a low risk venture. Especially for thosewho trade the large cap stocks. But is there really such thing as
low risk in these volatile times? Of course you can always just keep shorting the market. I think that can be the most risky inour current atmosphere. Some experts will tell you that swing
trading only works in a stable market, where the prices don’t fluctuate.

I would like to pass on some ideas and strategies, that with a slight mind set adjustment and a little training, you can reap big profits. I further contend that this can be accomplished on
a shoestring budget. I think most regular folk always saw the market as a playground for the big cats. That was until the influx of trading companies to the internet. So how much investment
capital should you have? To quote the investment companies disclosure, and I’m paraphrasing; “never invest more than you have to lose”. It is like gambling, make no mistake about it. That being said, I think with the following strategies, you can plan on investing a few hundred to a few thousand. Ideally, two to five thousand is an excellent starting point. If you keep an open mind, you will see for yourself, how the combination of these two systematic plans of action, can lead to
enormous profits.

PENNY STOCKS combined with CANDLESTICK CHARTING

Ha! Those experts will tell you you’re crazy to even think about the dreaded Pink Sheets. Because of their lax accounting and reporting guidelines, many feel “penny shares” are vulnerable to manipulation. I’m referring to the famous scam “pump and dump”. Where at times influential investors can pump up a stock, sell it for huge profits, then D-list the stock. I’m here to tell you, that even if you jumped on that band wagon, you would have gotten out with a profit, long before the wheels came off. A substantial look into this market however, will show that a lot of these small companies are honest and have tremendous potential. So lets say you found a way to insure yourself that penny stocks are the way to go. I think you can start to see the potential for large gains. I am going to provide you with a couple of penny sectors to get you started.

The first is an actual example that I made an astounding killing on. The “Nano Technology” sector is a great place to start. There are many Nano companies that already have financial backing and poised for tremendous growth. I’m not going to tell you which stock, because that
would take all the fun out of researching for you. However, I do want you to take a look at the kind of numbers this form of trading is capable off.

I’ll get to “Candlestick Charting” in just a bit. But I did want you to know that to find these little jewels I did use candlesticks. By tracking the technicals I found a nickel stock that was getting ready to make a move. Don’t get me wrong, I think fundamental’s are very important, if you are planning on a long term investment for your retirement, for example. For the purpose of swing trading however, knowing how to read the technicals is all you need. After following the stock for a couple of days, I got in at 8 cents for 50,000 shares. My investment was $4000. Now the main investors didn’t come in until it topped a quarter. At that time I had already more then doubled my investment. I stayed in it for a few weeks, setting my stop loss at thirty cents. At it’s peak the stock went to almost sixty cents. I got out with over $24,000 profit. Granted this doesn’t happen everyday, but it does occur more often than you might think. You just have to know where to look.

The other sector I would strongly suggest is “Clean Energy”. With all the attention clean energy is getting, the new commitment by our new administration, I’m sure there are small companies that are diamonds in the rough. As we move on to the next part of the equation, I want you
to keep this in mind. The fastest way to become a millionaire, short of
discovering or inventing something, or hitting the lottery, is to make the
right penny stock investment.

Now that you understand the fantastic possibilities a penny can bring, let me tell you the secret of unlocking this pink treasure. Let’s start with the
investing 101 concept that everyone knows. Buy low and sell high! So simple, yet why do so many fail to do it? Well one reason is most uninformed investors, get in much to late. Even a technical investor who does not use Candlestick Charting is playing a guessing game of sorts.

The Chinese invented the market concept, and the Japanese perfected charting techniques with the use of the candlesticks. It is easy to understand this complex system, if we simply break it down to the ticks on the chart you follow everyday. We know that the lower
tick is where the stock opened and the higher is where it closed. Now if we made the two lines parallel and connected them, what would we have? A candle. However, during that movement, the stock might have gone lower or higher then where it opened or closed, So our candle has formed a tail and a wick. Is it starting to make a little sense to you?
Take these examples:

1. Lets assume a stock opens two cents higher than it closed yesterday.
It later closes three cents higher than that. Should we get in? Not necessarily. Because as the candlestick showed us, even though it had a five cent swing from the day before, a long wick was created. This meant that it went even higher then it eventually settled on. That tells us
that the pressure to go higher wasn’t strong enough. We will put it on
our watch list, and keep a keen eye on it.
2.A few days pass with similar results. Suddenly there is a break in the resistance. The stock has formed a candlestick with a long tail. What does this convey? We might put a buy signal for a couple of cents
higher, because the long tail tells us that the bulls are ready to take over.
3. Ideally you want to wait for clusters to form. Of course the greatest
indicator is a long candle. One that opens and closes with hardly any
wick or tail.

4.Remember that volume will also help to determine the right stock.

There are many “characters” in the Candlestick System. I attended a $2000 workshop to learn this type of charting. However, you can learn these methods for literally pennies, compared to what I spent. If you have the right trading company that offers Candlestick Charts
make sure they also have penny stocks. Many of them don’t cater to
“Pink Sheets”.

I don’t profess to being an expert, but I do know of some. I obviously don’t have the time to go into all the details now, but at my site Market Mentalist you will find all you need to know about investing online. There is access to some of the top trading systems available including software, books, newsletters, and Forums. Whether you are an inquisitive novice or a seasoned pro Market Mentalist offers the online investment resource you just might be seeking.

You will find a whole new world of investing without having to attend an expensive workshop. All the tools and information you will need to get started in the exciting world of
PENNY STOCKS and CANDLESTICK CHARTING