Best Penny Stocks to Trade Premarket: Why Premarket Trading Strategy Matters Introduction When most people think about trading, they picture the chaos of Wall Street during regular market hours — 9:30 a.m. to 4:00 p.m. Eastern Time. But here’s the truth: some of the biggest opportunities for traders actually happen before the market opens. This window, known as the premarket session , can be a goldmine for those who know how to take advantage of it. If you’re interested in penny stocks — low-priced, high-volatility shares often trading under $5 — then premarket trading is especially attractive. With the right premarket trading strategy , you can spot momentum early, jump on news catalysts, and secure profits before most traders even wake up. In this article, we’ll break down exactly why you should trade penny stocks premarket , the benefits and risks, and actionable strategies you can use to build an edge. We’ll also highlight how to identify the best penny stocks to trade premar...
When should you trade penny stocks?
It's no secret that penny stocks are considered a gamble due to their volatility.
If you're new to the trading market, volatility is how fast a stock changes in its price either upward or downward.
Nonetheless, they're still considered a great avenue to make money fast.
Unfortunately, making fast money always comes with high risks and it's not any different when it comes to the stock market.
Penny stock, especially, is known for being the most dangerous in the market although one can make a lot of money in a matter of minutes from them.
It's crucial that you're always ready to take action.
This market is dangerous, unforgivable, and has no sympathy even if you're new to it.
Better yet, your stop-loss should always be set just in case your position goes against your expectation.
Before proceeding any further, it makes sense that a definition of penny stock is given.
What's a penny stock?
A penny stock is considered any stock that's trading at 5 dollars or lower per share. As you can see, a stock doesn't necessarily have to cost a penny to be categorized as a penny stock.
Although you are able to use most of the regular brokerage platforms to trade penny stocks, most of them are traded over-the-counter, or on Pink Sheet.
It's just another name given to this specific group of stocks because you'll still be able to trade them no different than how you would trade the other regular stocks.
Without further ado, let's move on to the main question.
What's the best time to trade penny stocks?
The stock market officially opens at 9:30 AM ET, however starting at 9:00 AM ET is called pre-market and traders can start making moves during this period of time as well.
But the market officially opens at 9:30 A.M ET.
Penny stocks are very unpredictable, but according to many penny stock gurus, the first 2 hours of the market are usually when stock traders make the most money.
You'll see that it makes sense if you've been involved in the stock market. Let's say that XYZ stock releases some sort of major news yesterday stating that they will start creating more products. This news will attract many potential stock buyers when the market opens.
Most of those buyers would usually try to buy their shares early with the hope that the price will increase shortly after.
However, there's no one who really knows what's going to happen with any stock.
Although you hear about all the technical analysis we are never 100 % sure of any stock's future.
Lookout for quarterly earning release dates
According to Investopedia, "A quarterly earnings report is a filing made by public companies, every three months to report on their recent financial performance. Quarterly earnings reports include items such as net income, earnings per share, earnings from continuing operations, and net sales".
Every stock releases its earning quarterly, and most of them have an expected number for their earning per share (EPS) that they have to reach. Whenever they surpass that number there's usually a spike in their price; on the other hand, if they fell to reach or surpass that number their price would usually go on the downside.
With that being said, traders usually pay close attention to those dates to try to make some money. Sometimes it would work, other times it would not.
Do your due diligent
The best practice to be sure that you can make profits trading stocks is to conduct your own research. It doesn't matter if you're receiving newsletters from other people who are telling you their thoughts and ideas; nonetheless, you should always do your own research before you invest to make sure that you feel comfortable with the transaction you're about to make.
You're the one who's putting the money on the line, you should at least educate yourself first prior to investing.
If you're reading this blog it already shows that you're being careful with your money. It's the most important factor in stock trading and there's no way around that.
Conclusion
Making money from the stock market has always been possible and it's still possible today. Unfortunately, people are still making the most common mistake, which is putting their money into the market without knowing the basics to trading successfully.
It's one of the reasons why this blog is here for, if you take advantage of the posts on here they should be able to help you through this journey.
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