Whats Holding Up Your Penny Stock Quotes
By Ultimate Trading
Understanding Support & Resistance For Penny Stock Quotes
People dont pay much attention to the people and objects that play
supporting roles. But, where would a house be without its support
beams? Where would the leading actor be without his supporting cast?
Well, the first one would be a wreck, and the second one, would
likely be a wreck as well. Not knowing how to use penny stock quotes
support levels can wreck havoc in your trades as well.
penny stock quotes have support and resistance levels. A support
level is a price at which the position has previously bounced and
reversed a downward course. Think of it as a potential floor in the
penny stock quotes prices. The reason it's so important to set stops
below support is that positions moving downward tend to bounce
upward around their support levels. Afterwards penny stock quotes
begin to move downward again, breaking through support, and move
even lower. A clear break below support is dictated by where a
position closes, not by intra-day swings.
Alternatively, after bouncing off support, penny stock quotes may
continue to move upward, never returning to the support level at
all. The one fairly specific rule in setting stop sells the
"science" part of setting them, is that you should not set them
either right on the positions support level or just above support.
Instead, unless the support level is so low that stopping out there
would lose you too high a percentage of your penny stock quotes
capital, set stops below support.
It doesn't make sense to set a stop right at support because the
penny stock quotes are almost certain to bounce up from that point,
possibly reversing course. If you set your stop below support, it
probably won't be triggered unless the penny stock quotes have
broken support and will continue downward. The key to setting stops
that work is to use the support levels that exist for penny stock
quotes. The same principle applies for a stop buy-to-cover on a
short position: Set your stop above, not at or below, resistance. A
resistance level is a price at which the penny stock quotes have
previously reversed their upward course. Think of it as a potential
You can use resistance levels to help set your trailing stops by
remembering that they often become support levels once they have
been broken through. When the time comes to use trailing stops to
lock in your profits, you can place your stop below what used to be
the resistance level, expecting it to act like a support level.
What's so special about the penny stock quotes prices that act as
support and resistance points? Is there something all the insiders
know about the company's valuation at those levels? Do they give
some clue as to the real value of the company? Unfortunately, they
There's absolutely nothing special about a number like $13 or $65 or
any other price that is a support or resistance level for penny
stock quotes. They're more like self-fulfilling prophecies. Everyone
in the market, from mutual fund managers to market makers to you, is
looking at the same penny stock quotes charts, and coming to the
Everyone expects penny stock quotes to bounce off support because a
support level is a price that is identifiable. The reason it has
significance is because it is identifiable, and everyone reading the
penny stock quotes charts will identify it. Because everyone expects
penny stock quotes to bounce off support, they usually will.
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