Understanding Penny Stocks Chart

The stock market can be very intimidating to the novice investor, especially in times of high volatility. Learning the very basic skills in penny stock trading, such as how to read stock quotes is very important. This is because once you have this basic skill; it will be a lot easier and quicker to understand the more complex areas of penny stocks trading.

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A penny stock chart depicts the changes in the price of a particular stock. The patterns in this chart are useful to a person who wants to make the right move, whether to buy or sell, while investing penny stocks. Penny stock charts can relay different kinds of information. There are charts which focus on the price modifications of the stock. Other charts concentrate on a specific penny stock’s moving average.

It is important to monitor and check, on a daily basis, the prices and volume charts of the penny stocks that you intend to buy and trade. You will be surprised to discover how frequently a stock trading pattern repeats itself. Studying price and volume charts that go back as far as three years ago may show vital patterns.

Getting familiar with the way penny stocks have been traded in the past may be beneficial as well, as this will give you a good feel of the way the stock might move in the near future. A guarantee of a pattern repeating itself is not 100% sure, but it does happen, and when it does it may mean instant profit for your investment.

There are various items to look for and analyze in a penny stock chart. The support level for a penny stock points out the lowest price drop in a certain period. On the other side, the resistance level of penny stocks is the point in the chart wherein the price is much higher than the demand. It is also important to look at the trading range of a penny stock as shown in the chart.

A trading range is a price range at which the value of the penny stock remains dormant for an extensive period of time. Once the stock chart pattern goes beyond the highest point of this range, it may possibly set a resistance level. Conversely, if it goes lower than the bottom of the price range, it is possible that the penny stock is on its way to establishing a new support level. http://www.pennystockpickreport.com/

The following steps may help to understand Penny Stock Charts :-

1. The volume bar

The volume of stock is shown by two vertical lines in the charts. One is at the bottom while the other is located a bit above it. Often there is a line at the lowermost part of the chart that corresponds to the one above. The lower bar is the volume of the stocks at a any given point.

2. The High and Low Value Indicator

Look out for any trend lines within the penny stocks chart patterns. Trend lines may possibly designate the future prices of the penny stocks. If the trend line is going upward, it may be a sign of future growth, while decline on the other hand might signify the opposite. It is also imperative to establish a comparison trend line as it will help determine if stocks are following the market and would have nothing to do with future price indicators.

3. The Open and Close Marker

Some stock trading charts have short stout bars with a slim line inside it. These thin lines are called wick or tail. This is where the name candle stick is derived. The thin line or the wick signifies the low and high values, as explained above. The fat line, which also looks like a short bar covering the thin line, indicates the open and close values. To differentiate the open from the close, the bar is shaded. If it is filled with black, the close was lower than the open, so the top of the body indicates the open and the bottom marks the close. If the body is filled with white the close was higher than the open, so the top shows the closing point and the bottom is the open. The shadows are thin lines that extend above and below the body to show the range between the days’s high and low.

If you're interested in making larger amount of money with low-risk investments whether you're a seasoned trader, looking for additional income, or just a starter, you can absolutely grow your income and improve gains. It has resources that can dramatically increase your returns and reduce the risk of losing your cash.

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