Buying penny stocks that cycle up and down on a regular basis is one
of the oldest and most reliable ways to make money in the stock market.
It's a very simple system that anyone can understand. The risk factor is
very acceptable as long as you do your research.

The second part of our trading system involves the process of using your
technical analysis trading software to track and trade stocks. I said earlier
that using technical analysis software is not necessary to trade stocks. If
you decide to use this type technology that's just fine.

Just remember that many (if not most) of the trading systems used in
technical analysis is based on some sort "Momentum-Recognition" factor.
This simply means that the software is programmed to recognize that the
stock is in motion based on volume or price fluctuations or other factors.

Many times the stock has already made a move upward before you start
buying in. The game plan here is to jump on the moving train and ride the
surge of "momentum" as far forward as you can, and then jump-off or sell
out, before the train slows to a stop.

If you use technical analysis trading systems to buy and sell penny stocks, you'll
need to follow your stocks very closely. The software that I recommended
earlier allows you to monitor every tick-by-tick move of any listed stock
that you might be following.

You can program your own custom formulas, or you can buy a trading
system designed by professional traders. You simply take their trading
system formulas and incorporate them into your software application. All
the good trading systems have been back-tested for accuracy.

Many newsletters writers use technical analysis to pick and choose the
stocks that they recommend. Once you get some experience buying and
selling stocks that regularly trade off a 52 week low, you might want to try
your hand at some momentum trading. It's riskier, so be very careful.

Be absolutely sure that before you start exploring the possibility of using
technical analysis, you get your hands on and read, a good book on the
subject, like the one's I mentioned at the beginning of this manual. You
should always practice trade before you ever jump in and spend money!