About a couple months ago this question popped into my head while I was studying of how penny stocks act during recessions. I became exposed to penny stocks and began studying 2 years ago in 2015 so I've never experienced or heard of anyone talk about this and I'm sure there is a lot of you that wonder this too.
Do stocks spike a lot less often? Is there more shorting opportunities? Is it like trading during summer where there aren't trades often? Or is it a time where you just shouldn't trade as it is less predictable and strategies don't pan out as often?
Just a thought in my head and wanted to have a discussion about this if you know or experienced penny stocks during recessions!
Posted Jun 10, 17 9:59 PMbyNick95
Categories
Smallcap
They are, for the most part, emotionally hype driven one-hit wonders. The 'trend' can last all of a few minutes or a few days and they are done. We are simply trading the newest headline for these low-priced and low float stocks. The only real exceptions are
the earnings winners that can run for a a lot longer or maybe a Phase 3 drug biotech success story...just know that cancer is a lot more news worthy than toenail fungus there. Soooo...as far as a 'recession' goes and penny stocks..I would put very little weight in how it affects (or effects - never got that one straight) the trade ability of them. Just my 2 cents here.
Then sometimes traders tend to concentrate & hone in more of the same & it the trend of traders' price action is to move that stock it can RUN. We should absolutely not be worried, as traders, about a healthy correction drop of @ 1500points, or even a bear market. We are at the right place to be either way! Even if lamestream media is panicking or hyping it up, us traders will always spot potential & trade it! :))
Tim has mentioned the likelihood of some of these patterns inverting. On days when the Pre market futures are down & then at the bell when the overall markets are down we see resistance points hold stronger. ie: former highs, moving averages... so some stocks like earnings/contract winners may take longer to play out as long as chart signs keep holding.
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