The time is always right to buy penny stocks as long as you know what you are getting into when trading them.
Maybe you've traded these types of stocks before or know someone who has.
If so, then you know that penny stocks are low priced, can easily gain 25% or more in a day and if there is good news about the company they can increase 100% and more.
That's why smart traders always have some penny stocks in their portfolio.
If you are new to penny stocks then you might wonder why they can rise in price so fast.
Nine times out of ten it is because of some positive news about the company whose stock you are buying.
For example, if a particular company is selling a product and gets a contract from - let's say Target - and an announcement about this contract is sent out, then you can bet that a smart investor is going to jump at the chance to buy that stock.
It's just common sense that profits from selling that product at such a high profile store are going to increase.
This would be a good time to buy penny stocks in that company.
Another reason for a stock to climb in price could be that the company is showing some positive business progress and traders and investors have been expecting it and are jumping on the stock.
On the other hand positive news doesn't always make the shares jump.
This is due to the fact that the stock is under the radar of trader/investor awareness.
So, just because certain companies have positive news it does not always mean it is time to buy penny stocks.
You need to look at volume to decide if it's time to buy penny.
Volume will show is these stocks are about to make enormous gains.
Volume surges in these stocks are a big factor when you are looking for those big hitters.
If you see high volume and the price of the stock is rising then you are seeing "buying pressure.
" The trick is to figure out how long this buying pressure will go on for you to determine if it is time to buy them.
If you are inexperienced or don't know how to do the research to buy penny stocks then you need to hire someone who has the expertise and knowledge.
Buying pressure is what microcap millionaires specifically looks for when they are picking these types of stocks.