Day trading penny stocks Vs Forex

[Seyyub]

I have traded FX for a few years now. Major FX pairs move on average 50-80 points a day so if trade £20 a point and capture 20 points then I have made £200.

I have recently started looking into penny stocks and I have come to know if I am correct that more money can be made on penny stocks especially if your are a technical trader as most penny stocks move 3-4 time as more than any FX pair. I believe with penny stocks we are speculating on the movement same way with a spread bet account and not buying the actual stock. 

Does anyone have any experience in day trading on penny stocks with IG? Is it true that penny stocks can be very volatile and therefor more money can be made if you are right?

Any feedback or suggestions would be appreciated

[jlz]

I am no expert on penny stocks but wanted to look for an answer just to see how is the field there.

Below is the chart  for First Majestic Silver Corporation (US), according to investopedia, it is supposed to be a penny stock. https://www.investopedia.com/updates/top-penny-stocks/

The chart seems to have a decent amount of bounces that would allow you to execute a day trading technique.

Minimum amount per point: 0.24£

Minimum margin required: 55.92£ (Margin factor of 20%)

You can get a trade with a small amount. It seems to be ranging about 100 points so a potential daily profit with the minimum stake would probably max about 25£

On the other side if we look at a Forex pair like GBP/USD

Chart ranges are quite similar.

Minimum amount per point: 0.5£

Minimum margin required: 213.12£ (Margin factor of 3.3%)

Looking that a Forex pair ranges about 150 points by average per day I would say that if you have the amount to trade on Forex, it looks cheaper and can get better returns. Margin factor is lower and there is way more liquidity available for bigger sizes.

There are many penny stocks so I guess it would be a matter of finding one that yields better returns. The one that I chose as an example doesn't seem to beat Forex. I would expect margin factors for any penny stock to be on the range of 20% like First Majestic Silver Corporation.

Do you have any company in mind that we could look at?

[dmedin]

3 hours ago, Seyyub said:

I have traded FX for a few years now. Major FX pairs move on average 50-80 points a day so if trade £20 a point and capture 20 points then I have made £200.

 

'If'?  So you've been making £200 a day for several years on forex then?

And that's not good enough for you, so you want to branch out to 'penny stocks' ... ROFL!  Good luck with that.