Finding the Best Penny Stocks | List of Penny Stocks

Posted on March 24, 2012 by PSC

Penny Stocks Chat provides a useful location to learn all about trading the best penny stocks. It can be valuable to utilize our penny stock chat room to help you learn from other traders. The stocks are often over looked and hard to find until well after the fact. There are however  tricks of the penny stock world and you’ve reached the right website to increase your knowledge in deciding which stocks to trade. It is imperative that you always perform the necessary due diligence before making any investment decisions.

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A list should be gathered from the most up to date tool. An active trader needs to spend many hours scanning the volume and price movement. The stock boards and chat rooms are a good place to source a hot moving penny stock. A good method to get started is to find the most active symbols being traded. This way an investor can quickly narrow down the hottest price action and volume. At this point take your list of penny stocks and start doing a lot of due diligence for each company. Take a look at their balance sheet and financials if they are made available. If the stock is being traded on the PINK sheet market then you may not be able to obtain much information about the company. You will probably have more luck with the OTCBB- Over the Counter Bulletin Board exchange as they are more regulated by the SEC. You should also take a look at the company profile and investor relations data. The market cap can also provide hints to how liquid the stock is trading. Once you’ve sorted through all of the data and have the best of the best then make it part of your penny stocks to watch.

After going through posts, chats, and bulletin boards you will eventually find which penny stocks that are trending. Create your list and discuss with other traders to get their take. Be careful in taking advice or picks from other traders as they may not have you in the best interest. Some will tout stocks for no good reason and you should be very careful not to fall into into a bad pick. If you can’t afford to lose your entire investment then don’t trade at all. These are high risk trades that can put you on quite the roller coaster of emotions. Even the most seasoned of traders can get caught up and lose a lot of money.

Your main goal is to find out the most current, hottest trends of the day. Some of these are promoted and some are not. Take a look at the disclosures to find out. These OTCBB and PINK sheet companies move fast. You don’t want to be on the wrong side of the trade. Be ready and be careful.

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Is Penny Stocks Trading for you?

Posted on May 4, 2012 by sam

Earlier this year, Mark, a newbie penny stock investor, watched one of his investments lose nearly half of its value by the end of the day. Mark was confused.  He was a newbie, but he felt he built some confidence, understanding, and learned a lot in the past couple months of trading.  He wanted to know where he went wrong. And before he had the opportunity to reevaluate and pick up the pieces, his investment disappeared all together.  He was pissed, frustrated and at a loss.

He asked me “What now?” “Where do I go from here?”

“What happens now?” he said.

I asked him a basic question. “What are your investing goals?”

Mark didn’t have an answer.  He hesitated and then rambled on about how he was interested in the markets and wanted to make money with a small investment. He didn’t have a specific financial amount he wanted to make and he wasn’t sure how he was going to make the money. He didn’t know his goal, game plan and process.  He wasn’t looking at the details, he was unsure about his next move and he wasn’t going anywhere without a strategy.

Let’s be clear and to the point.  Mark’s first mistake wasn’t that he was investing in penny stocks.  His mistake was that he did not have a strategy and plan.  He liked the idea of investing and making money, but he didn’t know where to begin.

Having a game plan is critical to your success.  If I had not had the opportunity to talk with Mark, I’m sure he, like many new investors, would have jumped ship on penny stocks. I talked with him more about the importance of goal setting, strategy, etc.  There isn’t a cookie cutter plan and every trader has his/her own trading plan. It does take some experience that you will get over time, and you must do your research.

This was a valuable and expensive learning experience for Mark.  Now, he is more cautious, and intentional with his plan making far better decisions and gains.

I want to help you avoid this same mistake.  Well, know that you will make mistakes, but let’s hope with some tips and guidance; you won’t fall into Mark’s original investment path. I want to give you the tools and confidence to invest in a way that works best for you.

Let’s start with the basics…. What are your investing goals?

This should be a clear and detailed answer. The first part of this will give you insight into yourself, which is awareness that every new investor should consider.

Your Personality is the Foundation of your Trading

What are your goals? Are you a risk taker or do you take your time and evaluate every angle playing a more conservative side? Are you interested in growing your bank account or preserving wealth?

Start here to find out what part of the market you should focus on. In reality, there are lots of ways to make money and protect your investments. Many people have made pretty pennies and nice fortunes in buying and selling stocks, options, commodities and international investments, as well. The point is finding a segment that fits you, your personality.

If you don’t want to or don’t have time to watch and be heavily involved with your trades every few hours, then you should stay away from day trading.  Also, this is not for you if you stress all night knowing that some of your investment is in a riskier growth stock.

It comes down to your very own comfort level.  You need to ask yourself what is your risk level, what will let you sleep at night, what your interests are, etc.

If you like evaluating stock charts, technical trading may be your thing. If you are excited about sifting through financial statements, value vesting may be it for you. As with anything in life, you’ll have a greater ambition and better chance at doing well if you like what your are doing because it fits your interests and personality.

Who Has Time For Stocks?

The next evaluation piece is time.  How much time are you willing to carve out to focus on stocks?

I see way too often newbies getting involved without a specific routine. If you are working a 60 hour work week with a demanding boss, it’s unlikely that you will have time or be able to make trades at your work desk during the day. If you don’t carve out a little bit of time over the weekend to keep up with the market news or do some research on a stock, you may want consider longer-term investments.

Now, if you do have flexibility in your schedule and you are willing to do the work, research and dedication involved, day trading or penny stocks could be perfect for you.  It’s risky especially being a newbie, but the rewards have very high potential.  Again, don’t jump in with all eggs in one basket expecting a huge gain.  You will make mistakes and have losses.  It’s about minimizing these losses, doing your research, and capitalizing on gains along the way…some of these can be pretty nice!

Whichever direction you go, start with a paper trade before investing with your money that you worked hard for.  There are even some online brokers that offer paper trading to help you get the hang of it first. Also, keep an online log or journal of your plan and what happened when you win and lose.  This will help you to see patterns and tune into your strategies.  This will help boost your experience, preparation and confidence when you use your money for the first time.

Resources

Do your homework!  Make sure you look for quality resources. These can be blogs, informational websites, and online trading tools.  Take it all with a grain of salt. Anyone that says this is the next best penny stock or the hot stock is not to be trusted.  Do your own research on a company.

For penny stocks, you can start with a list of penny stocks that give you the top 100 best penny stocks.  You can filter the list by volume, $ gain/loss, % gain/loss, 52-week high/low.  You can even put a few of your favorites in a watch list to see how they do overtime while you continue to look at their charting history, news, upcoming product releases, etc. Don’t be afraid to ask questions, even seemingly stupid questions. People on chat forums are often helpful. Make sure to reference your favorites with the penny stock list daily.

You can follow traders that have more experience, but my advice, is to get your own experience.  In time and patience and research, you will be ahead of most people out there.

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8 Penny Stocks to Stay Clear of

Posted on April 24, 2012 by sam

There are thousands of penny stocks out there to invest in. Some can turn a small amount of money into a nice profit very quickly. Penny stocks can be risky, but the reward is high when you know what to invest in and what penny stocks to stay clear of.  The first thing you want to do is look at a top 100 list of penny stocks to see which ones are doing well and have been doing well for some time. Make sure you evaluate them by look at their charting history, volume and latest news.  Are they a solid company that are there for the long haul, or are they here today and gone tomorrow?  Do your research, and pay attention to the following situations. You can learn a lot about trading at PSL.

The Salesman: Avoid anyone that actively seeks out to you to tell you about a great opportunity or investment whether it’s in person or over the phone.  They have great talking points and arguments that make sense, but they are working for their gain not yours. They are pressured to make the sale because they will make a commission or profit from the investment. They are doing their best to dump the penny stock on you, and the investment you pay in will wind up in their hands or the hands of their company.  Once you have the stock, you may have difficulty finding a buyer if you decide to sell when you see the stock drop.  This means that even if you try to get out, you will lose even more.

Remember, strong solid companies that are growing don’t need to pump and dump, but those companies that are struggling or have sketchy business practices are reaching out to grab onto whatever they can. If you aren’t paying attention or ignore this all together, they’ll get you and it will be what you deserve.

Low Trading Volume: When trading volume on a penny stock is very low, it can be difficult to buy or sell for the prices you want. Also, you can’t tell where the penny stock price is going.  It could be up or down in an instance.  There isn’t enough volume to see a trend or a steady increase or decline. You won’t be able to accurately determine fair valuations for the companies share price. Well, the bottom line is that companies with low trading volume typically are trading lower for a reason.  They are not attractive or have enough interest.  This could be due to negative press, product set backs, little history, bad management, etc.

Promotional Tips: There are many companies and professionals that are hired to specifically pump and promote a penny stock. They put out alerts or generate rumors that some penny stock is about to make it big. This rumor and energy gets spread through chats, co-workers, friends, family, etc.

If you fall into a promotional pump without understanding this factor, you can lose a lot of money. Most of the time if a penny stock really is about to spike, you won’t hear much about it because the investor wants to keep it quiet.

Now, there is one exception to this.  If you are aware that these promotional ploys are out there and you are willing to take a big risk, you can get in early, right before or at the time of the pump and sell before they dump.  I warn you though because this dump can happen within minutes.  You could be up $1.50 one moment and down $1 the next.  However, if you are lucky and do time it right and really watch the stock in real time, you can make a pretty penny.

Guaranteed Performance:  If it sounds too good to be true, it probably is. Don’t ever listen to anyone or any company alert if they guarantee your best penny stock to go up. These people very well may be a promoter, self-serving broker, or a naive investor that heard a rumor or alert from someone or somewhere else. There are no guarantees and it will probably go down.  Don’t believe anything unless you have done your due diligence. Evaluate company history, historic quotes and charts, news, or even call the company and ask about upcoming product releases or company direction. Just don’t move forward without your own proper research.

Sinking Stocks: Specifically with penny stocks, don’t bank on the idea that once a share price has dropped a lot, that you should buy it because it will bounce back up.  You may think that it is a good deal and it can’t get any lower, but you are wrong. They many never rebound and continue to sink.  You don’t want to get caught up in that. Again, do your research.

No Commissions: While commission free may sound enticing because you think you are saving some money, think again because this typically means that you are buying over the counter stock directly from the company or promoter.  They will make their own invisible commission off you by selling to you for a random price which could be very high, or they could sell to you at the asking price rather than bid price based on their their own valuations.

International: So if you think that you may find a hidden treasure outside  of the US or North America, I would strongly discourage you.  The best ones truly come from here, but lets take a closer look. Any penny stock from Russia, Europe, Africa, South America, etc are challenging because the investor protection is not great and the broker fees you will incur when you purchase internationally are high. It’s not worth it.

Warrants and Rights:  They are not technically stocks, but they look like penny stock prices and may be listed in the stock pages or lists. They get traded for even less.  They are derivative investments on an underlying company’s shares.  You probably won’t accidently purchase one, but make sure you have an understanding of what you are reading and buying. Then, make sure to verify the purchase with your broker.

If you apply these guidelines toward your best penny stocks, you often times are ahead of many naïve traders.  Do you research when it comes penny stocks to buy!

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Three Reasons to Fear Even the Best Touted Penny Stocks

Posted on April 16, 2012 by sam

Given that our blogs focus and embrace how to be successful when trading all penny stocks, it may seem counter-intuitive that I am suggesting that you fear best penny stocks.  I’ll explain why. I want to warn you because I have seen it time after time when traders make mistakes making penny stocks dangerous for these folks. Are these penny stocks too risky for you?  Well, let’s find out.

Many traders, newbies and experienced alike, end up getting involved with the wrong companies from the start for not good reasons and then don’t practice the best strategy. Any one of these bad choices can create a not so positive result leaving the once excited trader penniless and frustrated with penny stocks all together.  They may even decide to abandon trading all together thinking that it is way too risky for them and beating themselves up for the money they already lost.

The Wrong Company

Many times traders are wooed into the penny stock market because they heard from a co-worker or friend how they gained 500% in this latest, hottest penny stock.  They may have even heard some press about the history or special story surrounding the company.  While this is all great, this is hyped-up creating a lot of emotion around the stock.  It’s possible that the share will spike for a short period, but these investments do not have a strong foundation based on results and facts.  Where do they really stand in the market? Are they truly growing in revenue?

It’s human nature to want to rally around a company because you like their story or believe in what they are doing. The company may have great ideas, but the real question is will it produce?  Produce a product?  Product results?  Produce revenue?

Sure, get interested for these reasons, but give it some time to prove itself. Does the revenue increase? Did the just get FDA approval?  Did they just release a cutting edge product?  Is there debt diminishing? Is the press and news positive? If you don’t have the patience to see some of these good penny stocks show their true colors, you may be left empty handed.

The Wrong Reasons

Many traders can find themselves in desperate situations and many are often impatient. They are looking for a quick way to get rich. They are looking for the next hot penny stock. While this can happen with education, strategy and patience, most people don’t take the time to do it right. If you are one of these people, I would recommend to get out now before you lose too much.  If you are willing to learn and research, you may find yourself very successful.

If you passed the test, the first thing to do is to look for high-quality, well-run companies that have a successful management team and a solid foundation. Search for companies that pass Leeds Analysis (the standard research method for low-priced shares). While this all can be time consuming, over time as you look for patterns and know what you are doing, it can be the most profitable way to invest your money.  And a lot of fun I might add. I would suggest looking at the top 100 list of all penny stocks to get started. If you are in it for the right reasons and are willing to do the work, you will be amazed at what you uncover.

The Wrong Strategy

When traders choose the best penny stocks to buy or sell, often times they fall victim to themselves with the wrong trading strategy.  One of the most common mistakes is that most traders buy or sell all their shares at one time, rather than staggering the trades over time. Selling your shares over time and in three or four trades is many times more successful then off loading all the shares at once. This is true of larger stocks, and especially so with smaller ones, because they are thinly traded.  Thinly trading volume has traders battling with their stock’s volatility if they pick up or dump too many shares all at once.

Other penny stock traders make mistakes when they buy and sell with market orders, rather than limit orders. This is a huge deal when trading low-priced or thinly traded shares, but one that can be avoided from the start. With a market order, you get whatever price the person on the other side of the trade has dictated. With a limit order, you decide on the price you are willing to pay (or at which you would sell, if you’re on the selling side).

Being an alert and educated trader has its benefits. If you keep these three reasons in mind, you an transform your fearful trading into fearless investing by simply using your resources, doing your penny stock research and educating yourself.  You have the opportunity to made significant profits from solid, good, high-quality companies with low-prices shares.   Staying away from these mistakes can keep your head in the game and cash flowing.

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What’s your penny stocks strategy?

Posted on April 16, 2012 by sam

Most new penny stock traders think that the game is more about getting the insight and play first or at least early on a company, a good penny stock,  before they are discovered. They invest big at a low share price and then after tomorrow’s announcement, financial release, FDA approval or next big win, this little unknown up and coming penny stock goes gang busters. And so does the trader’s profit.

Well, this can happen.  You can receive high profits by getting in early on a stock with a good company and knowing when to sell, but if you played this with all of your stocks, you may have more losers than winners. It is important to have a deliberate and thought out strategy to reap the benefits and reduce the risk.

In evaluating any trade strategy for micro-caps and the best penny stocks, you have to look at entering and exiting positions just as the basics.  And you must monitor this closely and on an ongoing basis. Before you consider a trade, do your research on a company.  Look at the history of its quote and charts, news releases, newsletter or other marketing promotions, product releases, financials, market trends, the market segment (is it up or down) and volatility of stock.  You may even want to contact the company with specific questions and upcoming announcements to gather further insight into your trading decision.  Doing your homework can really pay off when you choose the right company to begin with.

1. Entering Your Penny Stock Position:

So, you’ve done your homework.  You found a great company that is trending upward, sales are up and perhaps a new product will be released soon. You think this is a company that will be around for a few years. Many penny stocks cannot say that, though…so look out and stay away from these. The best way to scan in real time is by using the PennyStream at PSL.

Now, don’t jump in right away.  Take a few weeks or months to evaluate and watch to see how it trades. Is the trading volume high? Is the climb steady or volatile? Look at some good low entry prices and then watch for it to dip slightly.  This is when you take advantage of the share price and get in.

Be careful, you don’t want to buy in all at once especially if they are thinly traded or the share is at a very low price. This initiation of your investment may be enough to drive the price up.  Look for the dips or just prior to a release or positive activity, and buy over time.  This could be spread out over 2 to 5 days.

You won’t need to worry so much about brokerage fees per trades.  Yes, you will have additional fees by buying shares over multiple days, but the brokerage costs are minimal.  This strategy will be worth it on the long run.

2. Monitoring Your Penny Stocks

The best way to monitor your investments is to find some good online tools.  The best ones provide news and press releases, company profiles, quote modules, charting, and top 100 most active penny stocks list (sortable by volume, % gain/loss, amount gain/loss, 52-week high/low, etc). Some websites provide these for free with a 20-minute delay. The best websites provide the same content only in streaming real-time. This is important because you want to know exactly what your stock is trading for in the moment.  Even minutes can make the difference between a big gain and a dramatic crash. These penny stock tools typically have a low cost monthly fee ranging from $29.99 – $89.99.  Real-time tools are your best resource for being able to stay on your toes and make the profits you go after.

The more time you take to see how the shares are trending, the more comfortable you will feel. You will be ahead of the game from many traders because you know their business, you have watched the trading history and you are in tune with where the company is headed.  You’ve done your research. You have confidence in your investment plan. So, now you are ready to feel confident on the sell.

3. Exiting Your Penny Stock Position:

Just like purchasing shares, a little bit over time, this same strategy can be used in selling.  Sell in stages. Again, with these low priced thinly trades shares, a medium to high amount of dumping can drive the share price down beneath the selling pressure.

A more though out and profitable strategy would be to sell your shares a little bit at a time on a day where the stock is trending up. The company appears to be strong and profitable. You can sell these a little bit at a time over the course of weeks or months. You don’t want to have your buy or sell to alter the overall share. As mentioned, with broker commissions being so low nowadays, you really don’t need to worry too much about taking big hits for trading service fees.  Focus more on your strategy, and the money will follow.

Also keep in mind, that it is probably better to have your investment diversified over a few different companies.  Even with the best strategy, sometime penny stocks can take an unexpected dive or jump.  You don’t want all of your eggs in one basket if you find a company crashing, even if they are the next best penny stocks to buy.

If you review these suggestions before each trade, you should see a more planned and deliberate strategy resulting in a better payoff and reduced risk. If you don’t have a plan, you might as well be putting it all on black jack in Vegas.  Do your homework, map out your strategy and know when to enter and exit.  Use your tools and you will be far ahead of most traders.  You will be educated and on top of it. And often times that is the only difference.

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Five Penny Stock Rules to keep you Ahead of the Game

Posted on April 12, 2012 by sam

Many penny stock traders are new to trading and get a bad rap because they are newbies and make a lot of mistakes.  Sure, everyone will make mistakes, but what sets you apart from those that fail and give up is simply taking some time to educate yourself. Failure and loss of money does not have to be the case if you follow a couple rules. Penny stocks can be quite lucrative if you follow the rules and do your homework.  You will find patterns, but the most important recommendation is to know the rules and be aware of what you are doing. Not many penny stock traders think what happens to their orders after they click the order button. Once you click the order button, you set in motion a complex series of events that are made to fill your order quickly and efficiently. Your stockbroker is your intermediary and the timing and result of the trade execution is an art rather than a science. And can vary from broker to broker.  To get started just keep these rules in mind and you will be ahead of your fellow traders.

1. Don’t Trade After Hours

Any stock trading that happens after the official close of the market is known as “after hour trading.”  Stay away from after hour and pre-market trading because the price can be off the marker. The liquidity is thin after the close, and even a small volume can make a difference in the share price that you will get during these hours.   After hour trading can give you insight to the direction of the next day’s trade, but it’s too risky to invest during this time.

2. Don’t Use A Market Order On An Illiquid Penny Stock

Be careful when evaluating penny stocks and typically you should not trade on lower volumes. Just by watching the top 100 list of penny stocks, you will find many penny stocks that have the potential to give high and volatile gains illiquid. What this really means is that these penny stocks are not being traded in mass quantities and the potential for a volatile price action is there. Keep in mind though that we everyone hears that the stock is about to go gangbusters, everyone want to be the first to jump in at a lower share price.  People hear about the potential spike through news from the company (for example, release of a new product), penny stocks chat, and email newsletter alerts.  Because the market is volatile make sure you protect your trade by always using a limit order and avoid using a market order.  You will have more control over the sell price.

3. Don’t use FREE Data Sources at the moment you put in a trade

Free data sources are great tools to research a company and identify the best penny stocks to buy, but at the moment you want to put a trade it, you need to be looking at real-time numbers to ave the most current share price. Suppose you are investing thousands of dollars in penny stocks, but you are still usually using a free data feed with a 20-minute delay. It would be silly to put in that large sum of money because you may think that the penny stock is trending upward, but in reality it was 20 minutes ago and now it could be crashing leaving you with a big loss.

Always use a professional fast speed data feed that can inform you about the fast moving prices in the market. Avoid the free data feeds like the Yahoo Finance and MSN Money. They are good for general info and researching the past, but when you are investing your hard earned money, you need a real-time streaming data more the most accurate data.

4. Don’t keep blinders on, do your research

It is important to be conscious of where you are putting your trade, your hard earned money.  You need to be aware and educated as much as possible.  Make educated decisions and learn the market. Penny stock trading is not Vegas.  You are not putting a bet in, rolling the dice and hoping for a win. This is not to say you won’t make mistakes, but when you have all of your resources at your fingertips, use them.  There are a few great websites out there that provide great tools all in one area so you don’t have to search all over the web.  Look for sites that give you a list of penny stocks, even better a list of the top 100 list of penny stocks sortable by volume, percentage gain or loss, $ amount gain or loss, 52-week low and high, charts with charting history, quotes, company information, and news feeds.  These sites also offer penny stocks chat, which can allow you to bounce questions and thoughts of other traders.  You can really learn a lot.  When you go to make your first penny trade, make sure to get the quotes in streaming real-time.  Some sites offer this option for a monthly fee, which is very reasonable for the potential gain.

5. Don’t put all your eggs in one basket, diversify

Don’t put all your money into one penny stock even if it is one the best penny stocks because you need to diversify.  Make sure to look at the penny stock prices and quote history when making a fair evaluation.  If you allocate a certain percentage of your investment into a few different stocks that you have fully researched, you are far better of if one takes a nose dive.  It’s important to also have a plan going into the trade that is a stock rises or drops to a certain share price, you will sell to avoid loosing everything or on the flip side not getting too greedy and then losing after a crash.

If you follow these simple rules when your start trading penny stocks, you will be ahead of the game.  Remember, it is ok to make mistakes and know that you will. Build trust in yourself and practice.  You will learn the patterns and trade with confidence over time.

 

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Lessons from Penny Stocks

Posted on April 11, 2012 by sam

The best soldiers are very often the ones who are in the front lines at war. They see first hand and are engaged the attacks and battles. They stay sharp, learn the most lessons, and improve dramatically over short time frames.  They don’t have a choice quite frankly.  It’s their life on the line.

The same thinking can be applied to penny stocks or making any investment in the stock exchange. Although, it is the list of penny stocks and shares that have got the most action, the swiftest moves, and the most volatility.

With this, it is widely accepted, comes the best potential for gains. Nevertheless it’s their efficiency as a teaching tool that actually makes them favorable investments for new and professional traders alike. Some of the explanations for this include the essential volatility of the shares, the size of the price swings, and the time frames concerned. At the very same time, stockholders who could otherwise have only afforded a position in 1 or 2 blue chip securities now enjoy a complete raft of selections and often finish up concerned in multiple corporations. Consider the volatility of penny stocks and shares. While many count this as a negative, it is really a required ingredient in the discussion that less expensive shares make for great teaching tools. Stockholders need to not only keep a keen watch on their holdings, but also develop an understanding to react fast, decisively, and exactly. Eventualities that will take ages to appear with blue chip holdings come to pass lots of times, or lots of times, over that very same time frame. Consider the size or the price moves in penny stocks and shares. If your giant cap equity rises in value 15%, there truly isn’t any weighty decision that’s wanted to be made. Contrast this with cheaper priced shares, and some of the fifty percent or one hundred pc spikes and dips that they typically experience. These moves in the fundamental shares are suggestive. They earn your attention and thought and traders have little choice apart from to react, and by so doing, they gain valuable experience. Penny shares make their moves, whether to the upside or drawback, in far less time.

Price moves of seventy five % can occur with blue chip stocks, but which will usually take years. With penny shares, you could be taking a look at a corresponding situation; only this eventuality presented itself in months, or weeks. With the shorter time frames, financiers in smaller stocks face multiple experiences. They hone their talents from many angles and still have masses of time left over for more learning.

Backers can buy more of the low priced shares, or pick up multiple firms with their little quantity of investment greenbacks. Rather than only owning IBM, as an example, you might hold stocks in 3 or 6 different corporations for a similar capital outlay.

Rather than only being involved with 1 or 2 firms, you might obtain a basket of them. Remember that every new company you research, and each company you follow, and each company you at last get, monitor, and trade becomes another advancement to you stock exchange learning.

While trading blue chips and retirement funds is an inactive approach to investing, becoming involved with penny stocks and shares is exceptionally active. The advantages can go far beyond the potential fiscal windfalls, and include learning more, and learning quicker, and learning better than with almost any other equity channel. Some of the finest traders in the world have been deeply involved in trading penny stocks and shares.

Most of them cut their teeth on the market’s “low end.” You will also learn the traders who are getting up to scratch the speedier, or those folks that are continuously improving their styles, and doing so at a magnificent rate, are often the ones that are open to, and active in, the littlest of stocks.

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What are the best Penny Stocks when considering Long-term Growth?

Posted on April 10, 2012 by sam

Many people beg the question which penny shares should they invest in for a long-term investment. Because there are actually thousands of penny stocks and shares, it is intensely troublesome to choose which possess the best growth possibilities. It’s helpful to look at the top 100 list of penny stocks to identify the best penny stocks, but there are many factors to consider choose your hot penny stock.

To begin with, I can explain that not all penny stocks and shares are equal. You’ve got to sort them out. Often, the low-priced stock industry is deluged with controversial practices. Many of the low-priced stock firms, often mentioned on the Pink Sheets or OTC Notice Board ( OTCBB ), are made for no good reason and its owners use devious stock promotion strategies to be in a position to sell shares to earn money. These corporations often have no real business with no prospect of making any cash in times to come. Nonetheless there are several real penny stocks to buy. I would click here to start your research. Some companies that were once considered penny stocks and shares now trade heavily on the exchanges. Some include Green Mountain Coffee Roasters Incorporated ( NASDAQ:GMCR ), Netflix Incorporated ( NASDAQ:NFLX ), and even Apple ( NASDAQ:NFLX ) These all once traded below $4. You will find masses of more examples of stocks that once traded below $1 and are now trading above $10 and mentioned on major exchanges.

Hence how will we know which corporations are real and offer the best expansion opportunities? First, you need to run a scan of stocks using assorted factors. This could be stocks that are presently trading underneath a particular amount, stocks with a market equity capital under an outlined threshold, or those with a price-earnings proportion underneath a selected value. All these signals can help to identify a undervalued stock. This changes in time, but today for example expansion industries might include mining corporations (particularly in commodities like gold, silver, molybdenum, rare earth metals), commodities like coffee, and battery technology enterprises that might grow from the inflating requirement for longer life batteries in electrical automobiles and stronger contraptions like smart telephones.

After you have cut down the industry, you need to complete homework on single firms. Inspect the corporation’s SEC filings and yearly reports to discover their business operations, growth plans, existing takings, monetary health and their ability to raise capital to be in a position to expand. In addition, a solid managing team is very important to an organization’s success. It is also feasible to call the business and ask to chat with higher management or maybe the Manager. Ask about their enlargement plans, financial standpoint and whatever else you must have the comfort of your possible investment.
You will be staggered by how available these folk are in smaller firms. Just because there’s an absence of trading volume doesn’t suggest that you need to avoid investing. Rather frequently it just reflects the actuality that there’s no media coverage for this actual company, they lack a backer relations dep., or maybe complex speculators still haven’t discovered the business and its expansion prospects.
After you’ve cut down the area of penny stocks and shares having a practical probability of expansion, you need to then employ sound risk control guidelines in your investing. Commit tiny amounts at frequent intervals, rather than one giant amount. Dollar cost averaging, while looked down on in some forums, is typically a great way for the regular financier to procure stocks in a company at a fair total cost. If eventualities change with the company or its business, don’t be afraid to admit the investment no longer is thought of as an expansion opportunity and cut back your position as required. Fairly often, taking a hit is the best call you can make.
On the flip side, should you begin to see valid progress and development in the organization, look for techniques to get more shares if the share price is steadily increasing. Penny stocks and shares have the prospect to provide incredible expansion opportunities which big cap stocks just can’t. Should you complete your research and implement reasonable risk administration practices with your investing, you are going to be able to definitely grow your portfolio with such investments.

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A Closer Look at Penny Stock Sectors

Posted on April 7, 2012 by sam

When you first look at the top 100 list of penny stocks, you may feel overwhelmed. Yes, you can use tools to sort your list by highest volume, % gain, $ gain, 52-week high, etc., but it to get a bigger picture, also evaluate the particular sector to understand that market best. By sector, I mean Pharma, Biotech, Internet band IT, retail, commodities exploration and commodities production. Here are some basic guidelines to follow with each sector.

Pharmaceutical penny stocks: Pharma penny stocks overall are sound companies and have a solid stream of revenue. You need to make sure your research each company because this is not true for all. If they have a high debt, losing money or little revenue coming in, stay away from these. You may have to sift through them, but when you find one that meets these criteria, it’s a keeper!
Biotech penny stocks: Don’t look to these for a long-term investment. They go through money like crazy as they work on the latest drug, FDA clearance or patent. Typically, these are only successful 10% of the time. If you want to get a little boost, pay attention to their news on their product or drug trail phases. As they get approvals, their shares spike. Get in on these for a short-term investment, but get out before they drop back down.
Internet and information technology penny stocks: The most important thing to look at with this sector is their cash burn rate. Are they blowing through cash fast and will run out soon? Or are they slowly burning and may be around longer? If they are well funded, have a lower burn rate, and are profitable or looking to be profitable, take a closer look at investing in this company.
Retail penny stocks: Retail penny stocks typically do well if they are at the beginning stage of a new trend. Well-established brands may not see much fluctuation and growth, so avoid these. Look to see if the sales are growing quarter to quarter and watch the news. Also, consider the overall retail market. Are sales down or growing? Even great new retail stocks can suffer if the whole market is down.
Commodities exploration penny stock picks: Exploration penny stocks are just that, exploring. They haven’t produced anything. They are looking for mineable areas. They will spend a lot of time and money on something that may never come to fruition. It’s more of a gamble than an educated trade.
Commodities production penny stock picks: These on the other hand, are mining and in production with resources. They are also selling the resources on the market. Just take a closer look to what their cost of production is in comparison with their competitors. For example, they are mining an ounce of gold for $798). Also, make sure to look at their reserve life index (RLI) which basically lets you know how much longer until the resource is dried up.
Taking these factor into consideration along with other research can help you make educated decisions and stand apart from other traders. Bottom line, do your homework to find the best penny stocks to buy.

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When to Sell Penny Stocks

Posted on April 6, 2012 by sam

The great majority of investment guidance is aimed at buying. This should not come as a surprise to speculators since it is the purchasing of stocks that starts the whole investment process. It is also the purchasing that generates commissions and charges for brokers. Naturally what’s acquired must be sold, and each trade takes commissions and costs.
Taking a closer look at Selling
Purchasing at the right price is important. The final return one will gain on any investment is first set by the buy cost. In a way, one can disagree that a decent profit or loss is formed on purchasing; you do not know it till you sell. And, while this speculation is deep set in elements of investing, selling is also important.
Indeed, while purchasing at the right price may eventually define the profit gained, selling at the right price guarantees the particular profit, if any. Therefore, if you cannot sell at the proper time, the advantages of buying at the right time vanish.
The Vegas Style Trade
The reason many have difficulty selling has roots in an inborn human inclination to be greedy. As an example, a trader purchases shares of a penny stock at .25 cents a share, and tells him/her that if the stock hits .85 cents a share, she’s going to sell. What occurs next is very common. The stock hits .45 cents and the financier decides to hang on.
Certainly, the stock reaches .50 cents and greediness continues overcome rationality. She holds out for more. All of a sudden the share price takes a turn downward and is back at .30. The financier then tells herself that once the stock hits .45 again, she’ll sell it all. Sadly, this never occurs and the share price continues to drift lower. Surrendering to her feelings and annoyances, the financier sells at .20 cents, below her first buy cost. As gluttony and emotion triumphed over sane judgment, sound investment elements were replaced by casino-like biases. The original result was a loss. So knowing when to sell is of great importance.
Never Try to Time Markets
Before getting into reasons to sell penny stocks, stockholders should understand that punctual selling doesn’t need accurate market timing. Only a few, if any, will ever buy at the bottom and sell at the top. Regard it as a hefty dose of luck if you do happen to do both. The most prominent traders didn’t succeed by purchasing at exact bottoms and selling at precise tops. As an alternative they concentrated on purchasing at one price, and selling at a heftier price.
Reasons to Sell

Provided that a share of stock is acquired at an acceptable price, there are just a few reasons to sell it.

Analytical Mistakes
If on purchasing shares, you later decide that gaffes were committed in the research – inaccuracies that basically affect the business as an appropriate investment – then you need to sell even if it suggests a loss will be sustained. The secret to successful investing is to depend on your info and research rather than emotional mood issues. If that research was defective for one reason or another, go on. Sure the share price can go up even after you sell, making you second-guess yourself, but the secret to successful investing is to profit from mistakes. Everybody will mess up. Learning from a mistake that costs you a ten percent loss on your investment could at last be one of the very best investments you make – if you learn a lot from it and go on to make better investment selections. Naturally, not all rational mistakes are equivalent.
For instance, if a business fails to meet short-term forecasts and the share price goes down, that is not always reason to sell if the soundness of the business stills remains untouched. From an alternative perspective, if you see the company losing share of the market to rivals that may be an indication of long-term weakness and likely an excuse to sell.
Rapid Price Appreciation
It is extremely possible that on purchasing shares, the share price, for one reason or another, rises significantly in a brief period of time.
The best traders are the most humble speculators. Don’t take such a fast rise as confirmation that you’re smarter than the final market. Indeed, one’s prospects of earning money in the stock exchange over the long term increases seriously if you purchase reasonably. But an inexpensive stock can become a pricey stock in a brief time for a bunch of reasons, some of which are likely due to rumination by others. Take your gains and go on. Even better, if the shares decline later on you could be presented with the chance to buy again. If the shares keep on increasing, take comfort in the old proverb, “no one goes broke booking a profit.”

This is the hardest reason to sell because valuation is part art and part science. The value of any share of stock eventually rests on the present price of the organization’s future money flows. Valuation will always carry a degree of imprecision because anything in the future is doubtful. Therefore that’s why price financiers depend heavily on the idea of the margin of safety idea in investing. A good rough guide, though in no fashion imperative, is to think about selling if the firm’s valuation becomes considerably higher than its market segment. Naturally, this is a rule with numerous exceptions. Another more reasonable selling tool is to sell when a firm’s P / E proportion noticeably surpasses its average P / E proportion.
The Final Analysis
In summing up, any trade that ends up in a gain is a good sale. When a trade ends up in a loss, and is accompanied by an experience of why that loss took place, it too may be regarded as a good sell. Selling is bad when it is dictated by emotion rather than information research. Remember not to evaluate your selling by regardless of if you are selling at the very top. Instead target selling for reasons dictated by sane reasons of valuations and cost. Look at your the top 100 list of penny stocks and then evaluate the penny stocks. Doing your homework pays off.

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10% Of Penny Stock Traders Go Bankrupt: What you Need to do to Avoid Failure and Move to the Top!

Posted on March 30, 2012 by sam

Did you know that ninety percent of traders who ever trade lose their account and that ten percent essentially go broke. If the 1st number does not shock you then the second definitely should. Why is it then that there’s such a significant number of traders failing? It’s not because they’re foolish; in reality most traders have a better than average IQ and are greater than average in most classes like education and earnings.

Education. So why do they fail? Absence of trading education! By education, I do not just mean learning how RSI works or drawing lines on a chart. I mean totally teaching yourself in all sides of your selected profession. Teaching yourself on the right mental approach to the market! Teaching yourself in the proper risk management strategies relative to your account size. Teaching yourself in the right exit and entry strategies for the trading style that is suitable for you.

Belief. There are some big misconceptions by new traders. They believe they can trade constantly with an eighty percent precision. They believe that they can turn $1000 into $100,000 in half a year. They think that they can envision turning points in their given markets to within a few minutes. They believe they can get a system that’s 100% correct. They believe they will give up their roles and earn a crust full time after 1 or 2 months of trading. What’s the explanation that so many new traders accept that trading is a simple method to generate excellent profits? It’s the hype. We are constantly battered in magazines, e-mails and the general media with declarations of making astronomic amounts, by applying the vendor’s latest strategy or system. Do not get me wrong, there’s brilliant stuff out there but the majority is not actually worth the price that you pay. I also endorse products but I have at least read the ebooks or courses and think they’ve got some worth to my customers and all of them have money back guarantee.

Trading 101. Penny stock trading is not exact. You cannot do X and get Y each time. It is about as much a skill as it is anything more. There isn’t any magical formula. Trading is all about chance. It’s the art of properly applying a group of fastidiously thought out rules and allotting the chance of that event to finish up in success. Each trade is an independent event. The market doesn’t remember if you lost or made bucks the last time you traded.

The way in which you approach the market psychologically has as much to do with your success as any trading plan. Risk management is critical if you’d like to have any hope of turning into a successful trader. Matching a strategy of trading with your character is the sole way you may ever feel comfy in the markets.

An adequately bankrolled account is mandatory – not only to be well placed to take the trades you need, but also so you do not feel each trade is a live or die situation. The journey to the road of profitable trading will make you confront your most important fears. Your armor on this journey will be confidence, information and belief in yourself you can achieve your dreams. Never, compare your success or failure in the markets with who you are as a person!

Emotions. As human beings, attempt to influence our environment and events we play a role in. This is one reason we, as a species, have succeeded but it’s also one of the elemental issues we’ve all got when making an attempt to achieve success as a traders. As traders we must realize we haven’t any control of the market and if we agree that then we need to accept that we will not influence the direction of the market. The issue naturally is we’ve got a bias to try to succeed and when unavoidable losses come, it is not hard to let those losses effect us emotionally.

Becoming happy when you hit a lucky streak is nearly as damaging as becoming depressed when you have a chain of losses. We as traders have to try to achieve the state of impartiality. We’ve got to accept that we’re going to have losses as quickly as we are going to have wins. Reaching the stage where you can nicely accept loss in the understanding that your methodology of trading will produce profits in the long term is the state we’ve got to seek.
Risk Management. Of all CTAs who managed funds, the most regularly profit-making were the ones with the best risk management systems. To trade successfully you’ve got to take a long look at yourself. Ask and answer these questions. How much money do I actually need to start? How much should I risk on any one trade? Am I undercapitalized? Over the course of these lessons I’ll do my best to help answer these and other questions.

Strategy.  As a trader you’ll doubtless fall into 2 main classes, traders who like to trade the breakout and traders who like to join the trend once established. We could also add congestion traders, reversal type traders and mechanical signal traders except for the great majority or traders you’re going to fall into one of the 2 classes. If you’re a trend trader, you want to outline a trend and then discover a way in. This might be with the help of fibonacci retracement levels, moving averages, Gann or one of the other many signals now available.

Your objective is to go into the trend as soon as possible with the smallest amount of risk. Breakout traders like to go into the market on the breakout of a formerly identified range.

This is going to be support / resistance areas, rectangles, triangles or one of many other chart patterns. The hidden key to this sort of trading is to figure out a legit break.

The Lesson. Here is a simple glance into the sector of trading. Also, I have taken a marginally negative position, as I do not want you to get excessive expectations of what can happen. On the more positive side, trading is an engaging world, which will permit you to actually improve your brainpower. There is not any other arena where you get to play with some of the finest minds in the world on a level playing field. Once mastered, if you can ever use that term then the opportunities are endless.

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