Penny Stocks - Friend or Foe

Daytraderz · Apr 29, 2016

A lot of mainstream investing media speaks of Penny stocks as a hoax, something you can't make money in and is really just a scam. Although this might be somewhat true for certain companies, with the right DD and factors coming into play, a lot of money seems like it can be made for investors. I'm beginning my journey with these things now and will keep you guys posted on the progress and factors I find to hold the most valuable when evaluating them.

Alxander · Apr 29, 2016

I made from $1500, $7000k in a month. I was in a pump and dump with warrant dilution.

I had $70 left in the end due to ignorance and greed lol

So if you know what you are doing, know what the company is and what it does and understand what A till Z warrants mean and you avoid them; you could probably make some bucks.

There are way better ways to invest time and money in like options IMO

Andrewski · Apr 30, 2016

At first i lost over $15,000 investing in penny stocks. After learning many lessons i got the hang of it, the biggest one is not to get greedy and sell when you've made money. My worst lesson was buying a stock around $0.45, watching it go to $1.50 and i was like omg this is gonna be huge and bought more. Then it went to $3.30 a month later. All my DD paid off i had made tons of money. But I didn't sell a single share and watched it dwindle down to $0.04. I still hold these shares with my account saying -$6,000 to remind me to sell when i've made money.

My strategy lately is i have 4-5 stocks i watch at a time. I believe all of them will be winners but i don't buy and hold. Two of them hover in the $0.30 range and have good volume so on a normal day fluctuate 3-4 cents. One of them this week was at $0.34 so i put in a order for 3 days of 10k shares at $0.31. Then when the stock bounces around the order gets filled and i put in a sell order for $0.36 and left that for a few days. When it filled i made $500-$20 in fees=$480 profit from a $3100 investment. Another one i did this week was a garbage pump and dump stock that keeps bouncing between $0.02 and $0.025. I put in a order for 50k shares at $0.02 ($1000), it took 2 days to fill. Sold the the next day for $0.025 ($1250), so $230 profit after fees for a 3 day investment. Normally i only get 1-2 low orders filled a week so it's not like you'll get rich but i've been making money doing this compared to buying and holding, praying it will go up and never knowing when to sell.

urveshvasani · May 1, 2016

I've worked with a client who ran a network of websites that sell info on penny stocks - from my discussions with them, they personally never put any money in penny stocks. So coming from someone whose biz is penny stocks that never invests I think that's enough evidence to stay far away from that stuff.

I am a big believer in value investing - read Benjamin Graham's work, it'll give you a completely different perspective on investing. Going in for the long run and making smart decisions I feel is the best way - that doesn't mean it can't be fun though, you can choose to be an enterprising investor or a defensive one, this entirely depends on the amount of time and effort you are looking to put in.

^uv

Sent from my iPhone using Tapatalk

Daytraderz · May 1, 2016

urveshvasani said:
I've worked with a client who ran a network of websites that sell info on penny stocks - from my discussions with them, they personally never put any money in penny stocks. So coming from someone whose biz is penny stocks that never invests I think that's enough evidence to stay far away from that stuff.

I am a big believer in value investing - read Benjamin Graham's work, it'll give you a completely different perspective on investing. Going in for the long run and making smart decisions I feel is the best way - that doesn't mean it can't be fun though, you can choose to be an enterprising investor or a defensive one, this entirely depends on the amount of time and effort you are looking to put in.

^uv

Sent from my iPhone using Tapatalk

Well I wouldn't ever buy info on penny stocks, I use bloomberg terminals or just research through google as most of the information is easily accessible if you know what you're doing. But I appreciate the advice! I agree, value investing is a brilliant long-term approach to investing. Penny stocks multiply faster than blue chips though, so far i'm up about +30% right now on my initial investment which I did in a day, so it is actually showing off as of now. That being said, it is very risky and if i'm not careful and attentive to the right technical indicators I can lose my money in a second!

urveshvasani · May 2, 2016

Daytraderz said:
Well I wouldn't ever buy info on penny stocks, I use bloomberg terminals or just research through google as most of the information is easily accessible if you know what you're doing. But I appreciate the advice! I agree, value investing is a brilliant long-term approach to investing. Penny stocks multiply faster than blue chips though, so far i'm up about +30% right now on my initial investment which I did in a day, so it is actually showing off as of now. That being said, it is very risky and if i'm not careful and attentive to the right technical indicators I can lose my money in a second!

True, it does multiply faster but at the end of the day, it's all speculation. You can still get similar (if not the same, 9x or 15x returns like OTC or PINK) with aggressive value investing - where you still get to play the game, make the dough but it requires a lot more work than studying charts because it reduces your risk of losing money. And of course, as Buffet says:

Rule No.1 of investing: Never lose money.
Rule No.2 of investing: Always follow rule #1.

^uv

Ubermensch · May 2, 2016

I relate with a lot of you traders, because our hearts pump the same blood.

I find that many of my trader associates in real life watch the same movies, and even tell the same types of jokes.

Most of them have big egos.

Some of them have god complexes.

Many of them consider themselves geniuses (if they're winning).

When they fall or fail, they do so as spectacularly as they win.

I've seen guys on a day they've made $500,000 in a day.

In some cases, I also watched them "disappear."

Anyway, greed is good fellas.

Money over everything.

Do it for the models, the private jets, the yachts, the stacks of millions, the vault full of tens of millions.

bringitnow28329 · May 2, 2016

You have things mixed up a bit. Investing and trading are two completely different things. You should invest in company's that earn a profit or have significant revenues which are expected to start profiting. The problem is most people are poor and can't afford to invest in a stock that trades for $50 a share so instead they are attracted to low priced junk penny stocks.

Penny stocks are not good investments. Penny stocks are trading vehicles and the majority of penny stocks are not even good trading vehicles anymore because of the lack of liquidity in this market after the SEC shut down most of the premier stock promoters in 2014. Penny stocks are meant to be flipped in the short term only. They hold no real value. Despite what the general public believes, the majority are worthless scam company's with no earnings, no profits, and zero future prospects of ever earning a profit. The chance of earning a profit in most penny stocks is near zero yet people with no idea what they are doing choose to gamble by investing long term in these crappy stocks.

There still are a few penny stocks that you can make money in in 2016 but most of the liquidity has now moved into the small cap stocks that are not on the OTCBB and Pink Sheets. These type of stocks can move several hundred percent at time just like the scam penny stocks because this is where large trades focus their attention now a days. I know all this because I have traded full time for a living since 2002. I have seen it all and then some. A few pieces of advice I can give you are that you have to take trading very serious. You can't expect to start making money immediately or think you are going to get rich quick. You only make money by taking some other guys money and most of the time that other guy will be a professional trader who has much more capital, better information and a much better understanding of how the market works. If you educate yourself for 6 months to a year before you put real money on the line you can start to see how traders operate and what really is going on behind the scenes in penny stocks and the market as a whole.

Daytraderz · May 8, 2016

Ubermensch said:
I relate with a lot of you traders, because our hearts pump the same blood.

I find that many of my trader associates in real life watch the same movies, and even tell the same types of jokes.

Most of them have big egos.

Some of them have god complexes.

Many of them consider themselves geniuses (if they're winning).

When they fall or fail, they do so as spectacularly as they win.

I've seen guys on a day they've made $500,000 in a day.

In some cases, I also watched them "disappear."

Anyway, greed is good fellas.

Money over everything.

Do it for the models, the private jets, the yachts, the stacks of millions, the vault full of tens of millions.

You seem to have a superiority complex. I don't do anything for models, private jets, yachts, stacks of millions... I do what I do to become financially free, to be in control of my own time, to support my friends and family if they're ever struggling in life with something, so I can spend my time on what matters most to me instead of what matters most to my employer. When I fail, like I have already plenty of times, I look for what I did wrong and learn from it and move on. Although I would to ask you why you thought it would be beneficial to post your pessimistic views on my thread, i'm not going to because I don't care. I am on this forum for constructive, positive, feedback; not some a-hole making assumptions. Money is a monetary unit, it has no real value. The only thing in life that has real value is time. Please get your negativity out of my thread.

Daytraderz · May 8, 2016

bringitnow28329 said:
You have things mixed up a bit. Investing and trading are two completely different things. You should invest in company's that earn a profit or have significant revenues which are expected to start profiting. The problem is most people are poor and can't afford to invest in a stock that trades for $50 a share so instead they are attracted to low priced junk penny stocks.

Penny stocks are not good investments. Penny stocks are trading vehicles and the majority of penny stocks are not even good trading vehicles anymore because of the lack of liquidity in this market after the SEC shut down most of the premier stock promoters in 2014. Penny stocks are meant to be flipped in the short term only. They hold no real value. Despite what the general public believes, the majority are worthless scam company's with no earnings, no profits, and zero future prospects of ever earning a profit. The chance of earning a profit in most penny stocks is near zero yet people with no idea what they are doing choose to gamble by investing long term in these crappy stocks.

There still are a few penny stocks that you can make money in in 2016 but most of the liquidity has now moved into the small cap stocks that are not on the OTCBB and Pink Sheets. These type of stocks can move several hundred percent at time just like the scam penny stocks because this is where large trades focus their attention now a days. I know all this because I have traded full time for a living since 2002. I have seen it all and then some. A few pieces of advice I can give you are that you have to take trading very serious. You can't expect to start making money immediately or think you are going to get rich quick. You only make money by taking some other guys money and most of the time that other guy will be a professional trader who has much more capital, better information and a much better understanding of how the market works. If you educate yourself for 6 months to a year before you put real money on the line you can start to see how traders operate and what really is going on behind the scenes in penny stocks and the market as a whole.

I've been investing/trading for a little over a year now, i'm certified in every Bloomberg exam they offer and use the terminals for my information, and I am aware that a lot of penny stocks might be scams, but that doesn't mean there isn't money to be made or that sometimes there are real companies that you can find through DD. For example, I recently entered SPHS, watched its graphs, analyzed its historical movements and patterns, analyzed the indicators and what they did in the past, waited for it to come up again and knew exactly where the price was going to slap the resistance level before slumping. I put in a limit sell at 1.80 after entering at 1.40 and made a decent profit while working out in the gym. This is just a hobby, something to do to make money in the margins of my life because that's how you become financially free, by playing in the margins of life. I appreciate your constructive feedback though.

Dave510 · May 9, 2016

Even though penny stocks are scams, you can certainly make lots from it. After all, where there's a scam, there's a scammer. That would be the guy making money.

Daytraderz · May 10, 2016

Dave510 said:
Even though penny stocks are scams, you can certainly make lots from it. After all, where there's a scam, there's a scammer. That would be the guy making money.

Very interesting way of looking at that, I like it.

bringitnow28329 · May 11, 2016

Daytraderz said:
I've been investing/trading for a little over a year now, i'm certified in every Bloomberg exam they offer and use the terminals for my information, and I am aware that a lot of penny stocks might be scams, but that doesn't mean there isn't money to be made or that sometimes there are real companies that you can find through DD. For example, I recently entered SPHS, watched its graphs, analyzed its historical movements and patterns, analyzed the indicators and what they did in the past, waited for it to come up again and knew exactly where the price was going to slap the resistance level before slumping. I put in a limit sell at 1.80 after entering at 1.40 and made a decent profit while working out in the gym. This is just a hobby, something to do to make money in the margins of my life because that's how you become financially free, by playing in the margins of life. I appreciate your constructive feedback though.

Do what you stated above 1000 times and then come back to me with the results. 1 trade does not mean anything. Even 10 trades mean nothing. The problem is penny stocks no longer have the volatility and the liquidity. You can find this in the smalls caps $1-$20. Look at SPHS. They just did a $5,000,000 offering and the stock is down big today. This is how penny stocks stay in business because 99.9% earn no profits and for the ones that do you have to be very careful because nobody is policing these companies for the most part. In fact up until Nov 2013, the SEC really never even did anything about blatant penny stock boiler room scams. By using various means to pump up their stock prices and then selling more stock to the public to raise cash and in effect, diluting current share holders. Trading can not a hobby. You will never learn to make consistent profits if you treat trading as a hobby. If you want to make money you MUST make trading your life because 99 out of 100 times that is what the guy on the other end of your trade is doing.

Daytraderz · Aug 1, 2016

Daytraderz said:
I've been investing/trading for a little over a year now, i'm certified in every Bloomberg exam they offer and use the terminals for my information, and I am aware that a lot of penny stocks might be scams, but that doesn't mean there isn't money to be made or that sometimes there are real companies that you can find through DD. For example, I recently entered SPHS, watched its graphs, analyzed its historical movements and patterns, analyzed the indicators and what they did in the past, waited for it to come up again and knew exactly where the price was going to slap the resistance level before slumping. I put in a limit sell at 1.80 after entering at 1.40 and made a decent profit while working out in the gym. This is just a hobby, something to do to make money in the margins of my life because that's how you become financially free, by playing in the margins of life. I appreciate your constructive feedback though.

Update: My

bringitnow28329 said:
Do what you stated above 1000 times and then come back to me with the results. 1 trade does not mean anything. Even 10 trades mean nothing. The problem is penny stocks no longer have the volatility and the liquidity. You can find this in the smalls caps $1-$20. Look at SPHS. They just did a $5,000,000 offering and the stock is down big today. This is how penny stocks stay in business because 99.9% earn no profits and for the ones that do you have to be very careful because nobody is policing these companies for the most part. In fact up until Nov 2013, the SEC really never even did anything about blatant penny stock boiler room scams. By using various means to pump up their stock prices and then selling more stock to the public to raise cash and in effect, diluting current share holders. Trading can not a hobby. You will never learn to make consistent profits if you treat trading as a hobby. If you want to make money you MUST make trading your life because 99 out of 100 times that is what the guy on the other end of your trade is doing.

UPDATE:
Since I started wit my initial investment I've grown my portfolio a total of 81.76% (with TRXC included its more around 50-60%.)

SPHS ended up going up to $9 and I sold out around $8 now i'm waiting for news and entered into a smaller position at $5.50
TWER,after a R/S went up a good amount an I locked in around a 40% profit
Swing traded EGLE, BAA, TRXC a few times for smaller but >10% returns
Lost around 20% on SKLN, and a lot on TRXC, but I'm keeping an eye on TRXC

Current portfolio value: $1,363.62
I'll update at $2,000 PV milestone

Also, I am doing this to learn man, to increase my chances at being financially free, why are you trying to hate on someone pushing to achieve their dreams? Just focus on you

Soulrize · Sep 8, 2016

I've been in the markets for quite 7 years+ and heres the basics.

1. Penny stocks are for small amounts and will never translate into large amounts . ie: no one would invest 25k into a penny stock vs a few thousand
2. Learning about penny stocks will not translate into knowledge that will be useful into the markets when you have larger sums of money to invest in bigger companies.
3. Most importantly is the consistency, its gambling in the sense you get a RUSH from the short term gains and when you lost money your like ehh(small amounts) this is key because stocks over 10 dollars have A LOT of consistency to them. for years I played with 3-10 dollar stocks and sure you can be right 60% of the time once you have the knowledge and experience but I much prefer the consistency of 90% of my stock picks trading for positives

458 · Sep 8, 2016

They will always be a gamble, your not investing. Penny stock companies do not have to provide audited financials, they can literally put anything they want and they usually do.

Daytraderz · Sep 9, 2016

Soulrize said:
I've been in the markets for quite 7 years+ and heres the basics.

1. Penny stocks are for small amounts and will never translate into large amounts . ie: no one would invest 25k into a penny stock vs a few thousand
2. Learning about penny stocks will not translate into knowledge that will be useful into the markets when you have larger sums of money to invest in bigger companies.
3. Most importantly is the consistency, its gambling in the sense you get a RUSH from the short term gains and when you lost money your like ehh(small amounts) this is key because stocks over 10 dollars have A LOT of consistency to them. for years I played with 3-10 dollar stocks and sure you can be right 60% of the time once you have the knowledge and experience but I much prefer the consistency of 90% of my stock picks trading for positives

***MISCLAIMER*** The stocks are not "penny stocks", they have market caps of usually 20m++ and can have some up to 200m

Look man, I truly appreciate your personal opinions and experiences within the market, but I don't necessarily agree with you based off of my experience. Which have been extremely positive and rewarding. You're right, penny stocks are for smaller accounts but their are orders that come in for thousands of dollars all the time on high volume and low float stocks where you can just make higher than average returns simply based off of chart analyses and other technical factors. I'm not looking for STUPID RETURNS, you know? I'm just humbly trying to make at least an average of $50+ in the stock market weekly so I can just keep building my current portfolio in my spare time. Start-up wealth, I believe, should be played in the early years of your life within the margins of your current priorities, like school or work. That's what i'm doing. Today alone, on a day where all stocks are doing poor, especially volatile ones, I made a little over a $100 gain in my portfolio. Yesterday I made $35. That's still pretty good if you ask me. My knowledge that i'm gaining will be used on bluechips. They work the same way just on a larger scale. Penny stocks are influenced by earning reports, daily economic factors, financial statements, the main and only real difference is the volatility of the price because of the lower market cap and influence in price from lower amounts of volume and low float. You believe what you want, but you don't know what you're talking about to be quite frank and real. You just sound like a poor close minded individual, if you truly want to be successful open your mind up and don't be so pessimistic and egotistical about life.

Daytraderz · Sep 9, 2016

458 said:
They will always be a gamble, your not investing. Penny stock companies do not have to provide audited financials, they can literally put anything they want and they usually do.

Not true lol. Look up TWER and go to their website. Click investor relations, click on financials, check out all their 10-Qs.

458 · Sep 10, 2016

Daytraderz said:
Not true lol. Look up TWER and go to their website. Click investor relations, click on financials, check out all their 10-Qs.

Trades on the NASDAQ, it is not a penny stock. Penny stocks trade OTC.

Soulrize · Sep 10, 2016

Daytraderz said:
***MISCLAIMER*** The stocks are not "penny stocks", they have market caps of usually 20m++ and can have some up to 200m

Look man, I truly appreciate your personal opinions and experiences within the market, but I don't necessarily agree with you based off of my experience. Which have been extremely positive and rewarding. You're right, penny stocks are for smaller accounts but their are orders that come in for thousands of dollars all the time on high volume and low float stocks where you can just make higher than average returns simply based off of chart analyses and other technical factors. I'm not looking for STUPID RETURNS, you know? I'm just humbly trying to make at least an average of $50+ in the stock market weekly so I can just keep building my current portfolio in my spare time. Start-up wealth, I believe, should be played in the early years of your life within the margins of your current priorities, like school or work. That's what i'm doing. Today alone, on a day where all stocks are doing poor, especially volatile ones, I made a little over a $100 gain in my portfolio. Yesterday I made $35. That's still pretty good if you ask me. My knowledge that i'm gaining will be used on bluechips. They work the same way just on a larger scale. Penny stocks are influenced by earning reports, daily economic factors, financial statements, the main and only real difference is the volatility of the price because of the lower market cap and influence in price from lower amounts of volume and low float. You believe what you want, but you don't know what you're talking about to be quite frank and real. You just sound like a poor close minded individual, if you truly want to be successful open your mind up and don't be so pessimistic and egotistical about life.

Yea I do agree with everyone having there own experience and my luck had me when my first stock tripled. I've been with the markets since and i don't believe you can only make 12% max on returns a year ever. However what your talking about sounds like you have no experience in the market and feeling that beginners luck I did and sticking to it. Look if your making money that a good thing however your catching small fishes aka penny stocks . Any stock is good to me as long as it has decent consistent volume. Most penny stocks dont have that and were talking about majority of penny stocks. knowledge is good and lucky is even better. I just found what makes me consistently lucky since my first trade. Trust me it wasn't any penny stocks I bought. But don't get me wrong I hate when people tell me I cant make more than 12% in the market statistically speakings in the same way Im telling you penny stocks dont make money in the long run. The main argument for this is because penny stocks has no pattern.by Pattern I mean that the people who invest in them. New people generally invest in penny stocks and new people can buy/sell shares anywhere anytime. While people with experience are a little more patient and financially literate have alot more consistent patterns to anticipate and take advantage of. If you can understand the average investor then you will make money. This is my exact method.

458 · Sep 10, 2016

Just buy quality and do your homework. Ive made 16% plus dividend with DFS in less than 6 months and it was no accident, one of only three companies that I own.

Sanj Modha · Sep 10, 2016

Isn't that how the Wolf Of Wall Street started?

Daytraderz · Sep 17, 2016

Sanj Modha said:
Isn't that how the Wolf Of Wall Street started?

no he started with real penny stocks, things that are traded by paper. These are used to be blue-chips

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