Day Trading Penny Stocks: The Top Penny Stocks for Day Trading

I’ve got a list of the top penny stocks for day trading for you, also the best top penny stocks 2024 tips you will find online…

A lot of new traders get excited when they read things like that. Are you one of them?

I get it. A lot of new traders are just looking for hot stock picks to trade. But my goal is to educate traders to think for themselves. Imagine never needing to ever follow someone else’s trades again…

Your goal should be to find your own stocks to trade. And learn how to trade them consistently.

Don’t be scared. It’s an exciting journey, and I’m here to help. It’s why I became a teacher. Don’t fall into the trap of following others. That just leads to frustration…

So read on to learn how to find the top penny stocks for day trading and how I trade them…

What Are Penny Stocks?

If you’re new to penny stocks, start with my FREE penny stock guide.

Penny stocks are an amazing little niche of stocks that trade for less than $5 per share. They’re listed on the over-the-counter OTC Markets or the major stock market exchanges, like the Nasdaq and New York Stock Exchange (NYSE).

While the definition of penny stocks is broad, it’s crucial to understand their intricacies before diving into trading. They are typically low-priced, volatile, and traded on over-the-counter markets or major exchanges. However, their potential for high returns makes them an attractive option for many traders.

If you’re new to this realm, start by understanding the basics of penny stocks. This will provide you with a solid foundation to build your trading strategies upon.

Pretty much all of Wall Street hates penny stocks. Professional traders, hedge funds, and algorithms don’t trade them.

That’s either because they think they’re trash companies, (and they’re not wrong) or they think the potential gains are too small. Meanwhile, my top students and I understand that small gains add up.

Can I Day Trade Penny Stocks?

Yep, you can absolutely day trade penny stocks. A lot of professional traders try to say that day trading and shorting penny stocks is illegal. But they’re wrong. I’ve been doing it for years.

A day trade is when you buy and sell a security on the same day. If you hold a position overnight, it doesn’t count as a day trade.

If you have less than $25,000 in your brokerage account, the pattern day trader rule (PDT) can limit your day trades to three per week. Learn more about the PDT here.

You can still trade penny stocks with a small account. A lot of my students started with less than $25,000 and have grown their accounts to six-figures or more. I think limiting your trades can actually make you a better trader. It forces you to avoid overtrading and focus on the best setups for your day trading strategies.

How to Identify Stocks for Day Trading

One of your first day trading tasks is identifying the right stocks. There are strategies and analysis tools that can help you spot potential winners.

Two things to look for: volatility and liquidity. 

Volatility because price swings can lead to profits; liquidity because it allows you to enter and exit a stock at a good price.

One of the most critical aspects of day trading is understanding the basics of trading itself. If you’re just starting out, consider learning the day trading basics to get a better grasp of the market dynamics. This will equip you with the necessary tools to navigate the volatile world of day trading.

Why Are Penny Stocks Good for Day Trading?

I think penny stocks are great for day trading because there’s less competition. Like I said earlier, hedge funds, professionals, and algorithms don’t bother with this niche.

For me, that means I’m competing against a lot of uneducated traders. Too many traders believe the promoters who pump up a stock’s product or technology.

They buy and hold forever thinking they bought the next Microsoft Corporation (NASDAQ: MSFT) or that their stock will be as big as The Walt Disney Company (NYSE: DIS) … They usually end up disappointed. I’ve seen it in one hot sector after another.

Penny stocks are also cheap. And I don’t mean cheap as in a good deal. I mean they’re low priced.

This means you can start day trading penny stocks with a small account. You can buy enough shares to make a profit in a short amount of time. You don’t have to wait a few years for a stock to move a few dollars per share.

That’s because penny stocks are volatile. Volatility means big moves in a short amount of time. If a penny stock company releases positive news, a lot of people buy in on the hype. A big spike in volume with news can really drive prices up, as you’ll see in my examples shortly…

My goal is to get in and out quickly, take a small piece of the move, and move on to the next trade. It’s how I’ve made over $7.4 million in trading profits.

Pros and Cons of Penny Stocks

Penny stock trading, like most strategies, isn’t all good or bad. Let’s break down the pros and cons of these under-$5 stocks.

Pros:

• Potential for Massive Gains: One of the key attractions of penny stocks is the possibility of making large returns. A small price change can equal a huge percentage gain.
• Small Initial Investment: Penny stocks, by their nature, don’t require a massive bankroll to get started. That makes them accessible to almost anyone.
• Volatility Equals Opportunity: The price swings in penny stocks might be dizzying, but they can provide opportunities for profits if you’re on the right side of the trade.
• Pattern Predictability: These stocks often exhibit predictable patterns. The key is learning how to spot and exploit recurring candlestick chart patterns for gain.

Cons:

• Low Liquidity: Many penny stocks lack the trading volume of bigger stocks, which can make them hard to buy or sell at the desired price.
• Limited Access: Some brokers place restrictions on trading penny stocks, making it difficult for many traders to trade them.
• High Risk of Scams: Unfortunately, penny stocks are sometimes used for pump-and-dump schemes and other forms of market manipulation. Always do your due diligence before trading.

Top Penny Stocks 2024: Penny Stock Day Trader vs. Penny Stock Investor

Let me be clear: I’m a penny stock day trader, not an investor. I once invested in one of these junk companies and got burned.

The funny thing is, I was right about the technology (print-at-home tickets for events). But I lost half a million of my own money because of the shady company management.

Read about it in my book “An American Hedge Fund.” You can get your no-cost copy here.

That’s why I never recommend anyone invest in penny stocks. I trade these stocks for the quick upside move, then move on. My goal is to make 10% or more per trade, not 10% per year like long-term investors.

Why I Day Trade Penny Stocks

I trade penny stocks because there’s little competition. And these stocks can make big price moves on hype and volatility, and the same predictable patterns repeat again and again. It’s not always exactly the same, but learning the patterns can help you find momentum.

Once you know the patterns and how other traders think, you can learn to take advantage of this niche. But you need to start with your education.

Don’t believe the hype of the penny stock promoters. Learn how to take advantage of the moves they create when uneducated “investors” buy in on the hype.

For my most comprehensive trading DVDs, get “How to Make Millions.” I start with the basics of trading terminology and go all the way into stock catalysts, patterns, and what I look for in a trade. All proceeds from this DVD go to charity.

One of the keys is to identify potential winners before they spike. This requires a deep understanding of market trends, company fundamentals, and trading strategies. One effective approach is to have a formula for finding promising penny stocks before they spike. If you’re interested in learning such a strategy, consider reading how I find penny stocks pre-spike. This could give you an edge in your trading journey.

3 Top Tips to Find Good Penny Stocks for Day Trading

So, how do I find the top penny stocks to day trade? I live for transparency. Here are my top tips…

Use a Stock Screener

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Use a stock screener to find the biggest percent gainers every day. That’s how I find penny stocks for day trading. There’s no big secret here. It blows my mind that I have to say this so often … I scan for big percent gainers on StocksToTrade every day.

I’m proud to say I helped design this platform and I’m a major investor. It’s designed for the penny stocks I love to trade.

Find out which stocks I’m watching every week. Subscribe to my penny stock watchlist here.

Watch for Breaking News

This is actually one of the best top penny stocks tips…

Once you find big percent gainers on StocksToTrade, check for a news catalyst that can drive up the price. If you don’t find news, it could be a promotion, a pump, or a sympathy play.

Throughout the day keep your eye on breaking news so you can catch stock moves early.

With penny stocks, there’s a lot of informational inefficiencies. Stock spikes can be delayed since most people who trade these stocks don’t pay attention to the news all day. They don’t hear about it until everyone starts talking about it.

But you can get the news that can move stocks fast with…

More Breaking News

• Oklo’s Recent Market Plunge: A Fading Star or a Missed Opportunity?
• Ford’s Strategic Moves: Navigating Workforce Changes and Union Challenges
• Structure Therapeutics: Navigating New Financial Horizons and Innovations

StocksToTrade

Is it obvious yet that StocksToTrade is my all-time favorite trading platform? I think it has the best charting tools, built-in watchlists, and customizable scans and settings.

Its new Breaking News Chat alerts members to breaking news relevant to penny stocks. And with broker integration, you can do everything from one place.

OK, I might be a bit biased because I helped design it. But that’s what makes it so great. It was designed by traders for traders, specifically for day trading penny stocks.

Get your 14-day trial for only $7.

Step-by-Step Beginner’s Guide to Trading Penny Stocks

Here’s a quick-start guide…

• Step 1: Educate yourself. Read articles, take courses, and learn the basics of investing.
• Step 2: Find a reputable broker that allows penny stock trading. Invest in screening and charting products like StocksToTrade.
• Step 3: Start researching. Look for businesses with solid fundamentals.
• Step 4: Develop a strategy. Swing trading? Momentum trading? Decide what works best for you.
• Step 5: Begin with a small amount of capital and be prepared to lose it — that’s the nature of the game. Build trading plans with reasonable goals and stop-losses. Track your results, and tinker until you reach profitability.

Risk Money and Honest Guides

Let’s be clear — trading, especially penny stocks, carries risks. Only use money you can afford to lose. And when it comes to learning, seek out honest guides who’ll give you the facts, not some overhyped idea of quick riches.

Start by Paper Trading

For newbies to the game, starting with paper trading can be a great way to practice strategies without risking real money. Test your strategies, refine them, and learn from your mistakes before you dive into the real thing.

Decide Which Types of Companies You Will Focus On

Are you into tech companies? Healthcare? Manufacturing? Deciding on a sector can help you focus your research and become an expert in that area.

Your Passion

If you’re going to spend hours researching and analyzing companies, it’s a good idea to choose a sector you’re passionate about. That way, the research feels less like work and more like a fascinating deep dive.

How Will You Generate Prospective Investments?

Finding potential investments involves scanning the market, reading financial news, and keeping an eye on the performance of various sectors. It’s all about staying informed and being ready to act when opportunities arise.

Top Penny Stocks to Watch in 2024

A lot of ‘gurus’ offer stock picks hoping that uneducated traders and investors will blindly follow and push the stock price higher. But you never hear from some of them after their buy alert. Did they sell? Where are they selling? What was their goal for the trade?

When I started teaching how to trade, I did it to shine a light on this industry. So I share watchlists and posts like this to help educate traders. I want you to be a self-sufficient trader. And I share as much as possible to help you learn the process.

Instead of giving you a bunch of random stocks to watch here, I’ll give you a list of stocks I actually traded. You can see my entries, exits, and trade commentary. Penny stocks move fast. So even if I gave you a list of hot stocks, they’d be out of play too fast.

Here are a few examples to help you start to learn my process for picking and trading stocks…

Amesite Inc (NASDAQ: AMST) — The AI Product Launch Penny Stock

My first 2024 penny stock pick is Amesite Inc (NASDAQ: AMST).

This stock has its feet in two hot sectors:

1. The biotech industry.
2. The AI industry.

These are probably the two hottest sectors in the stock market right now. We’ve seen individual AI and biotech spikes since early 2023.

AMST pulls momentum from both of these sectors, that’s one of the main reasons I’m excited about this stock.

Here’s the news that sent it higher:

On April 24 the company announced it successfully launched an AI app that will reportedly empower 5.2 million nurses. Share prices spiked 110% that day,

I grabbed 15% of the move with a starting stake of $14,742. My trade notes are below:

The reason I was able to trade this stock so early is because Breaking News alerted me to the move.

Now, this stock is still in play … But make sure you’re watching Breaking News for the next stock to start spiking.

AMST’s price action shows sideways consolidation right now … The consolidation is a hint that the price could spike higher!

On the chart below I drew a line that shows the $3 support level on AMST, every candle represents 10 minutes:

Plus, StocksToTrade shows that the float is only 1.7 million shares.

Stocks with a float below 10 million shares are considered to have a low supply. And the low supply of shares will help prices spike higher when demand increases.

AMST is still deciding whether it wants to break out …

But all of the factors point toward an explosive push upward.

Indonesia Energy Corp Ltd (AMEX: INDO) — The Oil Stock Benefitting From the Oil Shock

My second 2024 penny stock pick is Indonesia Energy Corp Ltd (AMEX: INDO).

We’ve seen oil stocks spike as a result of rising global tensions in Eastern Europe and the Middle East.

• The war between Ukraine and Russia.
• The war between Israel and Hamas.

INDO is a perfect example.

Russia invaded Ukraine in February 2022. INDO share prices spiked 1,800% as a result.

Fast forward to April 12, 2024, we learned of an incoming offensive against Israel from Iran. It signaled an escalation of the war in the Middle East. And INDO share prices spiked 140% in response.

The chart below shows consolidation above $4 after INDO’s most recent spike. Every candle represents 15 minutes:

Unfortunately, the conflicts overseas don’t show any signs of cooling.

As traders, it’s our job to take advantage of volatile price action caused by hot catalysts. Keep an eye on this oil runner as the world continues to navigate dangerous war-time catalysts.

Canopy Growth Corp (NASDAQ: CGC) — The Legal Weed Stock With the Huge Catalyst

My third 2024 penny stock pick is Canopy Growth Corp (NASDAQ: CGC).

The weed sector comes and goes. It’s never been the strongest batch of runners, but we have to respect CGC’s price action. The stock already spiked 231% between March and April.

This price action isn’t random.

There’s been a lot of talk about marijuana legalization recently. Both in the U.S. and worldwide:

• POTUS Biden and VPOTUS Harris both recently expressed an interest in reforming the U.S. approach toward marijuana.
• Germany decriminalized marijuana.

But CGC is also running thanks to a catalyst that was announced on March 14.

• There was news of a potential acquisition. The vote deadline for the acquisition was April 10. On April 15 we learned of a successful shareholder vote to endorse the acquisition.

I snagged a profit on March 22 thanks to the potential acquisition news. The price started running before we even learned of a successful vote.

Take a look at my trade notes below, with a starting stake of $21,420:

And now that the acquisition is successful, there’s a chance the price pushes even higher.

Below, a multi-month chart of the run shows support at $6. Every candle represents one trading day:

This stock is in play as long as it stays above $6!

Trading Challenge

In my Trading Challenge, I teach my trading strategy in depth.

I have several millionaire students and even more six-figure students, and I’m ready for more.

Do you have what it takes? Are you serious about learning how to take advantage of these moves without falling for promotions and hype? If you’re ready to take your education to the next level, apply for my Trading Challenge.

You’ll get access to the same video lessons, DVDs, weekly webinars, and chat room as my top students.

Top Penny Stocks Under 10 Cents

I occasionally trade stocks that cost literal pennies. Here are a few examples of my trades on stocks under 10 cents…

DSG Global Inc. (OTCQB: DSGT)

In 2020, I bought 67,000 shares at $0.055 after the company released some positive business news. I noticed a wall of sellers on Level 2 at the $0.06 area, so I sold at $0.056 for a profit of $268 (starting stake $3,685).

Halberd Corp. (OTCPK: HALB)

I bought this stock spiking on positive coronavirus news. I dip-bought 685,000 shares at $0.0125. I was hoping it could go back to its earlier highs. It couldn’t quite get there so I sold at $0.014 for a profit of $1,028 (starting stake $8,562).

Mass Megawatts Wind Power, Inc. (OTCPK: MMMW)

I traded Mass Megawatts Wind Power, Inc. (OTCPK: MMMW) as a low-priced EV sympathy play….

I got a partial execution of 74,285 shares at $0.017 on the morning spike. I sold at $0.021 for a $297 profit (starting stake $1,262). The overall market was tanking and the EV sector was losing momentum, so I sold and took the single.

Is Penny Stock Trading Worth It?

Penny stock trading isn’t for all day traders. It’s risky and unpredictable. But for some, the potential rewards are worth the risks. If you’re disciplined, do your homework, and stay vigilant about managing risk, it can be a profitable venture.

What are the Best Day Trading Stocks 2024?

Predicting the “best” stocks for day trading isn’t a simple task. It depends on market trends, economic indicators, and the trader’s personal strategy.

The best advice? Do your homework, stay informed, and be ready to adapt as market conditions change. You’re not going to find the next Apple, but you might be able to rack up some small profits.

Conclusion: Top Penny Stocks for Day Trading

Penny stocks are low-priced stocks that can trade on OTC markets or the major exchanges. There’s less competition in this niche, and I think it’s a great way to grow a small trading account.

Penny stocks run on news catalysts, hype, promotions, and earnings. They can have big spikes in a short time due to their volatility. So I’ve learned to enter and exit trades quickly, aim for singles, and cut losses quickly when a stock goes against me.

You can find all my trading rules here.

I’ve made over $7.6 million by recognizing the top penny stocks for day trading and the repeating patterns. And I teach everything I know to my students in my Trading Challenge.

You can see all my trades on Profit.ly. Use my trades to learn and build your knowledge account. When you’re a self-sufficient trader, you don’t have to follow anyone else’s trades or alerts.

What are your favorite penny stocks for day trading? Let me know in the comments … I love to hear from you!

Day Trading Penny Stocks FAQs

How Can Technical Analysis Improve Penny Stock Trading Success?

Technical analysis can significantly aid in trading penny stocks by analyzing price movements and share prices to predict future market behavior. Tools like stock scanners and continuation patterns help identify potential penny stocks, making it easier to manage risk and maximize returns.

What Financial Metrics Are Important for Day Trading Penny Stocks?

Key financial metrics for day trading penny stocks include market capitalization, earnings per share, and financial stability. These indicators help assess the viability and potential success of investment opportunities within the penny stock market.

Which Resources Are Essential for Novice Penny Stock Traders?

Novice penny stock traders should utilize resources such as the Timothy Sykes blog for education, stock tickers on a trading platform like StocksToTrade, and stock scanners to track unusual volume. These tools are crucial for developing effective risk management strategies and achieving trading success.

How Do Investment Goals Influence Penny Stock Trading Strategies?

Investment goals significantly influence penny stock trading strategies by dictating the level of risk management and the types of stocks selected. Traders with well-defined goals are better equipped to select speculative stocks that match their risk tolerance and investment timelines.

What Are the Key Challenges in Managing Penny Stock Investments?

Key challenges in managing penny stock investments include handling the inherent volatility, dealing with illiquid stocks, and managing the high costs of trading. Effective cost management and understanding the unique dynamics of penny stocks, such as the allure and risks of low float stocks, are critical.

How Can Traders Use Market Patterns to Predict Penny Stock Movements?

Traders can use market patterns such as bull flag patterns and breakout over premarket highs to predict penny stock movements effectively. These patterns, coupled with real-time market data, provide insights into potential daily runners and the biggest percentage gainers, helping traders make informed decisions.