Penny Stock [Success!]

[NerdSmasher]

I have noticed throughout this section of the website, that a few people have been interested in penny stocks; however, whenever someone is, someone else always seems to tell them that it is more like gambling than investing. Or, that it isn't likely, not a good way to invest, etc. etc.

I thought this was a board of how to, not don't do!

Having enjoyed ventures in penny stocks for the entirety of my investing journey, I can certainly say that they are not a gamble, necessarily, and that it is quite possible to find and invest in them each and every day for profit! Though, I'm not to that point yet, myself.

But, they offer a much different investment than do most stocks. In my experience, most stocks only offer, perhaps, 10% growth per month with any reliability or consistency; and if you can get that out of a stock (not options) consistently, then I would love to know your methods! However, with options, it is possibly to multiply those gains to, well, I don't know exactly what, but I do believe that good investors who know how to use options can trade large cap stocks and make hundreds of % per year, with pretty good consistency.

Penny stocks, on the other hand, can and do make 10% - 200% (the most I've seen) in a single day, once they take off. And, they can continue to go up for weeks, or even a few months; though if they are up for months, it's probably not going to be a positive % every day. But, still ridiculous returns.

The challenge, of course, is finding penny stocks that will go up. Well, the only way I've done it is simply to go brute force through many, many, many charts (I used T/A to make my picks) and find ones that have what I'm looking for. If you don't believe that it's possible for someone to pick a penny stock before it goes off, watch the stocks I have listed here for the next few days/weeks, and see where they go. They probably won't all go up, but if you wait until they show signs of moving up to buy, you can usually be in for most of the ride and still make nice gains

Stocks I'm watching:

ADTJ
AMTO - Recently began move up
BRVO
CMEG
GPGI
GRUS
HWBI
NTBKQ
PGSW
SDRG - Began it's move up the day after I found it. And still looks to be going up further!

 

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[czach41]

Hmm, very interesting. I am currently in the market, but I have a grand worth of $66/share stock. I have been interested in switching over to penny stocks for better growth. I'll be keeping my eye out on these picks!

 

[MrDoctor]

Penny stocks ARE a gamble. It's near impossible to find out solid information about management and the company, without making a trip to the company, and meeting the management yourself. They can restrict much more information as compared to a stock on the AMEX, NYSE.

 

[kimberland]

There ARE analysts that cover penny stocks.
I've purchased a few myself,
for my fun portfolio.

If you do your research,
(and MrDoctor is right about having to do legwork yourself)
you can do quite well
(especially if you hold a basket of them).
You can also lose everything.

 

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[NerdSmasher]

Generally, that's why I focus on the technical side of analysis... it is a lot of work trying to find out information about the management, etc... But, I also don't hold them long enough for that to matter, and if it doesn't do what I want it to, I will get out quickly. There are plenty of ones doing what I want them to, I just need to find them!

And, I tend not to pay too much attention to analysts covering penny stocks... simply because they are analysts who usually look at it the same way they would a large company, and... well... it just doesn't fit.

It's all personal preference though; and penny stocks are not for those with low risk tolerance. But, if you can handle dealing with what seems to be great risk while you learn how to play them, they can become a great investment choice for fast short term gains. And that's what I'm going for

 

[DustinS]

You might as well play options if you want high risk/return.

 

[MrDoctor]

There ARE analysts that cover penny stocks.
I've purchased a few myself,
for my fun portfolio.

If you do your research,
(and MrDoctor is right about having to do legwork yourself)
you can do quite well
(especially if you hold a basket of them).
You can also lose everything.

I've witnesses may small companies go from $0.10-$15.00. If you can spot the upcoming companies early, then you will have success, as long as they are making PROFIT and a product or service that people will buy/need/use.

 

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[Jonleehacker]

Penny stocks ARE a gamble.

Untrue. Only the person buying the stock can be a gambler or an investor. If I take the attitude of an investor what difference does it make whether or not the stock trades for $.10 or $100. They may require a different system to properly manage risk, but both type of stocks can be traded for a profit while managing risk effectively.

Personally I love trading penny stocks. I love to be able to purchase 10,000 shares and ride a penny for a $100 gain.

Another interesting topic for discussion with stocks is the importance of the "entry" or stock selection. If in fact you are trading short term, then the exit (let the winners run, and get out early on the losers) is far more important than the stock you select.

I've been tempted to head over to the Investopedia and paper trade a system with purely random penny stock picks (okay maybe not pure random, I'd probably have a minimum volum limit) and see if by just making good exits, it can make money.

Most of you will have heard of it but "Trade your way to Financial Freedom" is a great book on developing a short term trading system. The author, Van Tharp used to do seminars with Robert Kiyosaki and the book emphasis the need for personal development in order to make money trading stocks...in order to be able to have the self awareness to trade a system, and not trade your greed and fear.

 

[NerdSmasher]

Well, lets see how my picks did this week:

ADTJ: Down a bit more, looks to be still consolidating.


AMTO: Consolidating after a recent move up, good looking dragonfly dojis, could make another move soon.

BRVO: Didn't do much until Friday, when it fell more. Doesn't look like it will do too much anytime soon :/

CMEG: Made a very nice move this week, but fell, and has been falling, since the day after that move. Still, it would've been a 166% gain if you had sold at the top, and would still be a 100% gain if sold now.

GPGI: Eww... nothing good at all here... I don't even know why I have it on this list... *shrug*

GRUS: Seems to be trading very volatile lately, but has a nice support level it keeps bouncing off of. Could go higher, could continue consolidating.

HWBI: Finally made a nice move Friday, which will probably continue for a while.

NTBKQ: Still consolidating

PGSW: Went down a bit, but seems to have possibly bounced off of a bottom. No good signs indicating an up or down movement.

SDRG: After it's initial big jump, it's just been going down.

 

[MrGold]

Guys. Where do i start? Whats the best trading platform? What is the website to analyze the charts?
thx

 

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[RideHD]

thx1131,

While I don't really trade in penny stocks, I will be happy to assist you (any of us, in fact) in getting into the market. I sent you a note. Time to get your feet wet!

Jamie