Penny Stocks how can I start?

[bringitnow28329]

If you take into account dividends it is not but dividends don't pay 8% a year to give you that 40% return over 5 years, therefore the 5-6% is coming out of the pocket of some other person. Also high dividend paying stocks are usually not that volatile so day traders are less interested. There's a complete difference between a day trader and an investor. A day trader is trying to pull a pay check out of the market unlike an investor.

That's simply not correct. If you're looking at 2 day traders, sure it's a zero sum game. But when you figure out how to make a quick $1000 and sell it at a slightly higher price to a guy who holds the stock for 5 years and makes a 40% return plus dividends, you've both achieved your goals. Options are mathematically a zero sum game - stocks are not. Different goals and time horizons mean you can both win or both lose.

I'm sure a lot of day traders felt like geniuses selling Heinz and Coca Cola to Warren Buffett at a small profit.

 

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[bringitnow28329]

Been on the Tim Skyes site, been reading and following and even subscribed. Lots of information to take in. I am still processing the information. Probably take me another 6 months before I start to trade.
There are some brokerage houses that will let you open an account for $500 bucks but then the brokerage fees kill you.
If you have a 401k at your job some will let you buy in on some stocks and sometimes they will wave the brokerage fees.
If you happen to open an account with a brokerage house they have programs to let you paper trade so you can get the hang of buying and selling.
Setting stop losses.
Tim Sykes posts all his trades and releases teaching videos just about everyday of the trades he has made both good and bad.
Follow the stocks, do the research on the company. Read just about everything you can. Politics, Religion, Wars, Oil, technology, China.
Penny Stocks are not meant to hold forever. From what I have seen they are great to make your money quick and get out.
Buy a $1000 bucks worth of a company you have researched and if it goes up a $1.00 get out. Nobody says you have to stay in for the long haul.
So what if the stock go's to $10 a share. You made money and got out.
If you want long positions, Apple was a pretty good stock to hold after the split. 2 weeks ago it was down to $90 bucks a share now up to $95.00
Yahoo was down to $30 a share and now up to $35. They own 23% of Alibaba which is about to go IPO.
Even crackberry which was down to $8 a share is now up to 11.21.
The pre-release of their new hand held made the stock rise. There has been so much news on the buy that if you had purchased $1000 worth of shares it would have made $3200. Then minus the brokerage fees and taxes.
There are plenty of free sites to get stock info on.

I'll let you know 6 months from now how I am doing. I am reading, setting up my brokerage account.

The brokers that allow $500 or even $2000 will not let you short sell. Also the executions are terrible because they are retail, non direct access brokers. The exception is Suretrader but the fees will kill you. One brokerage account isn't nearly enough for shorting penny stocks. If you think you are going to follow him and make money consistently think again. I can guarantee you will not. Trading $1000 will do nothing for you especially with Tim's strategy. Trading $10,000 or $30,000 is really the only way since the number of opportunities are so limited with Tim's strategy since he only trades high probability setups in liquid penny stocks and most penny stocks are illiquid. You are wasting your time if you don't have a $50,000 account and trying to mess with Tim's strategy.

He'll try to convince you that you can trade just like him and start are with a small account of a few thousand but this is a straight up lie. Tim originally started with $12000 as did Tim Gritiani. Michael Goode started with $800k that he got as an inheritance.

 

[ArthurDayne]

If you take into account dividends it is not but dividends don't pay 8% a year to give you that 40% return over 5 years, therefore the 5-6% is coming out of the pocket of some other person. Also high dividend paying stocks are usually not that volatile so day traders are less interested. There's a complete difference between a day trader and an investor. A day trader is trying to pull a pay check out of the market unlike an investor.

The dividend is just an example, we can assume all 40% is capital gains. The CGs are not coming out of the pocket of the other investor. The day trader is happy with his little gain, and the long term investor is happy with his long term capital gains. It's not zero sum because of the differences between a day trader and an investor - different goals and timeframes.

You are wasting your time if you don't have a $50,000 account and trying to mess with Tim's strategy. The brokers that allow $500 or even $2000 will not let you short sell. Also the executions are terrible because they are retail brokers. The exception is Suretrader but the fees will kill you. One brokerage account isn't nearly enough for shorting penny stocks. If you think you are going to follow him and make money consistently think again. I can guarantee you will not.

On this we can agree - NetNinja, dude you're asking for a disaster.

 

[bringitnow28329]

Where do you think the money is coming from?

The dividend is just an example, we can assume all 40% is capital gains. The CGs are not coming out of the pocket of the other investor. The day trader is happy with his little gain, and the long term investor is happy with his long term capital gains. It's not zero sum because of the differences between a day trader and an investor - different goals and timeframes.


On this we can agree - NetNinja, dude you're asking for a disaster.

 

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[ArthurDayne]

Where do you think the money is coming from?

Capital gains come from an increase in the market-determined price. Am I taking money out of your pocket if the stock goes up a year later after you've sold it to me? No, you're completely unaffected. You're confusing actual losses with opportunity costs.

 

[bringitnow28329]

Capital gains come from an increase in the market-determined price. Am I taking money out of your pocket if the stock goes up a year later after you've sold it to me? No, you're completely unaffected. You're confusing actual losses with opportunity costs.

The original poster was asking about penny stocks not legitimate companies and my post was a about short term trading because I am a professional trader, not an investor. Nearly all OTCBB and Pink Sheet Penny stocks are scams. Investing in penny stocks leads to losses 99% of the time. Trading penny stocks for a few minutes, hours or a couple days at most is the only way to make money in penny stocks. The only other exception is if you just gamble and get lucky but this is not repeatable.

Most people believe you can't make money in penny stocks because either they gambled and bought ABCD otcbb stock due to some flyer they received in the mail touting it, and then loss money or have just read in the financial media about reasons to stay away from penny stocks. Penny stocks are a zero sum gain because there's no value being created long term. Any capital gains are short lived in nearly all penny stocks. No penny stocks generate profits and few if any ever pay dividends. All you have to do is look at the long term chart of most penny stocks and you will see that they all just spike up when they get pumped ever 3-12 months and drop as the promoters dump shares. You are taking money from the other uninformed person which is exactly what I was referring to.

 

[bringitnow28329]

You do realize the companies are required to post that they are going to reverse split? You obviously did not do any research. Any decision you make in the financial markets is solely up to you. Penny stocks are scams plain and simple. This doesn't mean you can't profit off them but don't try to say that others can't profit because of your bad experience.

I bought a penny stock once.

I put in $1k.

It went through a 50 billion (or what ever) to one reverse split.

A day or so later I was left with $11.

F*ckers.

Never again. Un(der)regulated.

 

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[Vigilante]

If you reread your post out loud back to yourself again you will see why it's not worthy of any substantive response.

 

[MyronGainz]

I bought a penny stock once.

I put in $1k.

It went through a 50 billion (or what ever) to one reverse split.

A day or so later I was left with $11.

F*ckers.

Never again. Un(der)regulated.

A stock split doesn't reduce the value of your ownership....

 

[jazb]

Tim sykes made his money in the tech bubble when thousands of internet companies were being formed everyday. im sure theres some stock market genius that probably could take 10k and turn it into millions, but thats 1 in a million

go create some value, legitimize it, scale it and monetize it

 

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[Vigilante]

A stock split doesn't reduce the value of your ownership....

Na it split, and then the price dropped like a deflating balloon. All the way down to next to nothing. Scamorama.

 

[GuestUser113]

If you reread your post out loud back to yourself again you will see why it's not worthy of any substantive response.

 

[MyronGainz]

Are there any really large companies (F500 even) that started off as an OTC/Pink Sheet?

 

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[Guest3722A]

How is daytrading currencies any different from penny stocks? Do you really think you have an informational advantage, or more laughably an "edge", in currencies?

Well, seeing I'm an INTJ I definitely have developed an edge. (That was a joke). On a serious note, I do have an absolute 100% edge which works on the M6E which is the micro-future contract on the euro/usd. As a matter of fact, this edge is so prevalent that I programmed my system into sierrachart and sierrachart traded it for me...even while I was sleeping. that's how comfortable I was with my system. I even let my system run while I went for knee surgery. Ya, that confident in the "edge".

But back in the day when I used to post tons of non-stop winning stock picks live, here on the forum, I didn't have any of this, "yeah I owned that one" bs... I actually posted several charts here that the fastlane forum software actually surprisingly updated my charts daily which was awesome because the forum members could watch my calls play out.... and I put alot of em up here!

I'm not sure if that's still possible with the current forum software, but I think it would be great if there was a way to one day set up on the inside my software placing live trades that everyone could see.

@Berters : pivot points do work quite well within specific volume ranges but there's an additional layer that goes along with the pivot point that I learned along my trading journey, and not every pivot gets traded. I think alot of people stop at the surface of pivot trading without programming any further into the system.

 

[Berters]

@Berters : pivot points do work quite well within specific volume ranges but there's an additional layer that goes along with the pivot point that I learned along my trading journey, and not every pivot gets traded. I think alot of people stop at the surface of pivot trading without programming any further into the system.

Interesting...something I'll have to try and investigate when I have some free time! I still find it all so interesting.

 

[ArthurDayne]

On a serious note, I do have an absolute 100% edge which works on the M6E which is the micro-future contract on the euro/usd. As a matter of fact, this edge is so prevalent that I programmed my system into sierrachart and sierrachart traded it for me...even while I was sleeping. that's how comfortable I was with my system. I even let my system run while I went for knee surgery. Ya, that confident in the "edge".

That's pretty amazing - but the logical next question is, if this is the case, why haven't you leveraged up and made hundreds of millions off of this 100% edge?

 

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[brandonrush]

Are there any really large companies (F500 even) that started off as an OTC/Pink Sheet?

Off the top of my head, Monster Energy was a penny stock. It's now trading in the $60.00 range.

 

[Guest3722A]

That's pretty amazing - but the logical next question is, if this is the case, why haven't you leveraged up and made hundreds of millions off of this 100% edge?

Well, that’s always the fluffy dream (for everybody here) and I do recognize your sarcasm. The reality though is that the system only worked consistently on the M6e which equals only $1.25 per tick. And the system itself was designed to build a position one contract at a time around a set price point as opposed to taking a chunk of contracts at the opening buy/sell signal. Trades were not signaled daily and averaged 1-2 per week, but with a high 90% success rate. On many of these trades the system only took one contract and at 8 or fewer ticks (I use a walking stop not a trailing stop and program my stop to go above break-even after a set amount of ticks), and at $1.25 per tick, one contract isn’t going to financially support much of anything outside of building this fun little puzzle. The system is profitable and consistent but not scalable in its current state.

The R/R also starts at 2:1 with an above 90% success rate, which makes taking the risk more stomachable, but to get the success rate closer to 100% I was able to get the R:R closer to a 1:1 by programming an additional rule after an opening signal was triggered but this would obviously result in the system taking fewer trades.

The next logical question is probably going to reference the euro currency contract 6e or the e-mini Euro currency contract e7, and ask why I just don’t use either of those to scale, and, eventually one day I will. But at this point, I have experimented with paper-trading each and they both have too much extra noise but I have also taken some live trades on the e7 which resulted in more losers than winners. I think it can be controlled, but for me, not right now.

My personal conclusion up to this point is that trading is not fastlane and the project I am currently working on is.

 

[MyronGainz]

Off the top of my head, Monster Energy was a penny stock. It's now trading in the $60.00 range.

That's interesting to note, thanks for the share

 

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[Guest3722A]

Also something to keep an eye on are cannabis stocks. The industry in the US is on the verge of breaking wide open as the feds are hinting to some monumental changes in the current laws. Many cannabis stocks are trading at or around the penny ranges.

Edit: Here's an interesting one -- TRTC

its trading below .50, just ipo'ed this year, is in the hydroponic grow kit industry and has growth in INSIDERS buying.

There's alot of 'em like this and I have a feeling that if the feds remove it from being a schedule one or better yet, just go legal for medical or possibly even small amount recreational use for 21+, I think many of these would have some pretty amazing parabolic jumps.

 

[AubreyJ]

Are there any really large companies (F500 even) that started off as an OTC/Pink Sheet?

American Airlines was a penny stock 2 years ago, It was $.46 2 years ago and now it is at $38 and its all time high is at like $45.

 

[MyronGainz]

American Airlines was a penny stock 2 years ago, It was $.46 2 years ago and now it is at $38 and its all time high is at like $45.

Penny stock meaning OTC/Pink Sheet

 

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[Guest3722A]

I'm interested in seeing if this latest forum software updates this chart daily. If so, I'd like to watch to see what happens over the next few months with this one -- TRTC .

 

[julien515]

The only way you can make day trading pennystocks a fastlane venture (which is VERY unethical) is if you:
A.) Position yourself as the "Guru"
B.) Set up a site with badass copy that attracts sidewalkers
C.) Set up a newsletter to capture your disciples emails
D.) Join a CPA Network for affiliates to send you traffic
E.) Buy an inactive penny stock one day,
F.) Send them a "Groundbreaking" Stock Report that a new stock pick is set to inflate at a rate of 4000%
G.) Put YOUR stocks for sale at a 4000% increase

The funny thing about it is, the "guru" buys the stock lets say at .002 a share and puts it up for sale at .08 a share - then he sends out the "groundbreaking stock pick" as the stock market opens & all the sidewalkers gather their money ready for the 4,000% increase, & try to all buy in. When all the sudden big demand meets with no supply on a dead stock, guess who gets the 4000% increase? I'm sure you guessed it.

He then takes a screenshot of the 4,000% increase that day, rewrites a newsletter and "congratulates" everybody on the good day & to be ready for tomorrows "under the table" stock pick. And the cycle continues...

Lol isn't that illegal, it's sounds an awful lot like a pump and dump!

 

[jpmartin]

Aside from the 'not ever being able to predict the future' aspect, think about the risk: no matter what or how you trade, you're risking everything in order to make a little every time you make a trade.

I think this is the solution: don't risk everything. Trading doesn't involve risking everything. The only place you hear "ALL IN" is on the tables of Las Vegas. Instead, follow a disciplined approach by risking only a portion of your capital (cash is your inventory) - usually this is just 2% -4% per trade, with a maximum exposure of 10% of your entire portfolio (basically across 4-5 stocks). This way if you lose 50% on any trade, your loss in the big scheme of things is just 1% - 2% of your portfolio. This keeps your gun powder dry...

Of course, I'm not specifically talking about stocks, I'm more on the options trading side... there's another thread here.

 

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[jpmartin]

Are there any really large companies (F500 even) that started off as an OTC/Pink Sheet?

Pretty much! Nestle - and it's still trading as OTC!

 

[DeletedUser8]

I've traded for a living for 10 years. I trade all different type of assets classes but I focus on NASDAQ, AMEX, and NYSE stocks in the $1.00-15.00 range. A lot of these are classified as penny stocks even though they don't trade for pennies. I used to trade OTCBB and Pink Sheet scam stocks but the liquidity in this market has disappeared after the downfall of some of the big stock promotion groups that pump and dumped stocks. Now the liquidity has flowed into exchange listed small and microcaps. The true penny stocks market is not really a viable trading vehicle anymore for someone like myself that takes $50k positions.

Here's some things you should know about trading.

1. It took me 2 full years of losing before I ever earned a profit in the market.

2. Trading is one of the hardest skills to learn but quite easy once it starts to click. It takes a lot of hard work and effort to learn how to trade profitably. It's not something you will learn in a week or a month

3. Most people fail at trading because they think the stock market is a get rich quick scheme and treat it as such. Trading has to be done as a business. You take small to medium profits over and over again.

4, 95% of people lose money in trading because they look at the stock market like a giant casino. You should look at it as a casino but your perspective has to be from the seat of the house, not the customers to the casino. You have to learn how to take advantage of these unsophisticated people to profit in the market.

5. There's no holy grail trading system or day trading robot that will instantly let you make money from the market. Technical analysis does work, but not basic technical analysis which you can learn about in books and online for free. You have to reverse engineer technical indicators in order to take advantage of inexperienced people that don't understand how the game is played.

6. You can't make money "following" peoples trading alerts. This DOES NOT WORK. Despite being an egotistical shmuck, Tim Sykes does have a legitimate strategy but it requires $50,000+ to be able to trade like him (despite what he may advertise and make people believe) because you need to open brokerage accounts with 3-4 brokers and each require between $10,000 and $35,000. Tim Sykes does make several hundred thousand dollars from actual trading his own money, but he doesn't make enough to buy the Lamborghini that he drives. He sells pretty much worthless DVD's and useless trading alerts and brings in $4-5 million's a year doing this. The reason he seems to make money every single time is because he has 4000 subscribers to his alert services. When he sends an alert thousands of people follow him pushing the price of penny stock up or down based on his recommendation He then can sell into the subscribers and earn a profit nearly every time. If the stock does not go up he can also sell or cover his short trades into the subscribers and not lose much. All the subscribers lose big as they run for the exits when he is wrong.The stocks he alerts move so fast by the time you receive the alert the stock already moved $.25 to $1.00 and Tim is ready to exit his trade. You never can make the same profit as Tim because of all the competition between his subscribers who don't know how to trade and instead try to just follow him. The reality of the situation isTim is doing something called front running. Normally it would be illegal but he disclosed his position every time so it's not. None the less it's very unethical to sell these services. If you have a lot of money $50k+ you can scalp his alerts for profits but you WILL never make money with a small account or 1000, 2000, or 5000 and these are the main people who are attracted to penny stocks and the market (slow laners and blue collar workers).

7. The only way you can make money is to learn to make trading decisions yourself. Being self sufficient is essential.

8. Most people have no business being involved in trying to time the stock market. I spend 10-12 hours a analyzing stocks. I work very hard to be prepared and better informed then the guy that I am going up again. I have to do this because in the market you are in constant battle. You have to be more knowledgeable than the person who is on the other end of your trade because the money doesn't appear out of know where. It comes out of some suckers pocket because the stock market is a zero sum game where you always have one winner and one loser on every trade.

Keep your ignorant opinions off of this website. I stand by everything else you said, but you're very misinformed with regards to Tim Sykes and his subscribers. "Learn to take advantage of unsophisticated traders..." falls under Tim's short-selling strategy, it's all based on recognizing the inefficiencies and manipulation within a particular stock and coordinating a proper entry/exit point.

 

[jockinbox]

Why this thread has lasted so long is beyond me...

 

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