Let's talk Penny Stocks

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Does anyone here routinely trade in these? I've been tracking a lot of these lately and have been thinking about jumping in. I realize that liquidity can be a problem sometimes with these, but I'm wondering how often that happens.

One thing that I've noticed is that penny stocks really MOVE... you can double, triple, or even quad your money in only a few hours, or you can lose it all, too. (I see it happen every day, the stocks are so volatile because they spike for a single session and then drop back down the next day because there is no support to sustain a real trend) The only way to handle these things is to day-trade: catch it below the spike, ride it up, and then dump it, all in a few hours. Fortunately, a lot of the technical analysis and charting methods/patterns still apply.


My current plan is to buy a lot of these things a few times a week and go for little windfalls that add up instead of going for one big win. I'm looking for a broker that doesn't charge heavy buy/sell fees or high commission b/c I don't want the middleman eating up too much of my profit. Any recommendations?

 

[~attrACTION~]

Any recommendations?

Yes. STAY AWAY FROM PENNY STOCKS!

I lost roughly $6000 on penny stocks. Sure there were days that I made $600-$700, but overall I lost big. Seriously, stay away from penny stocks. If anything, go with small caps.

I think you have the wrong idea. There is no "get rich quick" formula. Stick with real estate or business. Stocks are a gamble.

A mentor/friend of mine who is much older than me and trades in the millions gave me this advice about stock investing: only invest the money that you are willing to throw away and burn; if you're not willing to just shred that money right now, you are not ready to invest it in stocks.

If you still decide to do it, here are two sites I used a lot: www.barchart.com and www.allpennystocks.com

Good luck. Even though I don't believe in luck, I think you will really need it.

 

[CLOONEY]

Yes. STAY AWAY FROM PENNY STOCKS!

I lost roughly $6000 on penny stocks. Sure there were days that I made $600-$700, but overall I lost big. Seriously, stay away from penny stocks. If anything, go with small caps.

I think you have the wrong idea. There is no "get rich quick" formula. Stick with real estate or business. Stocks are a gamble.

A mentor/friend of mine who is much older than me and trades in the millions gave me this advice about stock investing: only invest the money that you are willing to throw away and burn; if you're not willing to just shred that money right now, you are not ready to invest it in stocks.

If you still decide to do it, here are two sites I used a lot: www.barchart.com and www.allpennystocks.com

Good luck. Even though I don't believe in luck, I think you will really need it.

lol, exactly, there is no get rich quick forumla, to make money, you have to study hard and work hard!

Though attraction says "There is no "get rich quick" formula. Stick with real estate or business. Stocks are a gamble".

Stocks ARE business. So you mean just stick to real estate? If so, solid blue-chip stocks are just about as secure as real estate, the trends will always be upwards in the long-term, and an economic meltdown will hit real estate just as it will stocks. When I talk about "solid" blue-chip stocks, I am talking about companies like Coca-Cola, even in recession, this kind of product will still be drank in abundance, it is never going to go bankrupt. Or the odds are just as likely as your house disappearing!

 

[spider_007]

you can make 40% in a day, and loose 60% the next day.....and keep in mind that most brokers outhere need 1 day (sometimes 2) to sell (if they can)

If you can live with that kind of gamble (stress) feel free.

 

[Celadus]

You have a very high negative expected return in penny stocks. Lots of insider trading, stock manipulation and mafia activity going on. You can't make money without an edge. I did make 500% return on a gold mine in the filipines over the summer, heh. But that was the first and last penny stock I'll do.

 

[~attrACTION~]

Though attraction says "There is no "get rich quick" formula. Stick with real estate or business. Stocks are a gamble".

Stocks ARE business. So you mean just stick to real estate? If so, solid blue-chip stocks are just about as secure as real estate, the trends will always be upwards in the long-term, and an economic meltdown will hit real estate just as it will stocks. When I talk about "solid" blue-chip stocks, I am talking about companies like Coca-Cola, even in recession, this kind of product will still be drank in abundance, it is never going to go bankrupt. Or the odds are just as likely as your house disappearing!

Since my losing streak, I've stayed away from stocks altogether, so I guess I'm a little quick to jump the gun and cry out that all stocks are bad; even though I really don't believe it, it's just a habit that's come over me.

I guess what I meant was that penny stocks are a gamble - not stock marketing investments altogether.

I think a good compromise between less volatility and high potential returns is to look into small caps stocks.

 

[Bible_Belt]

Avoid penny stocks, by that I mean pink sheets and otcbb. If you have skill at trading, you can make money in the 'real' markets, the nyse and nasdaq. Trading is difficult enough without giant spreads, high commissions, crappy liquidity, and market manipulation. There are all kinds of rules to protect nyse/nasdaq traders that are not available to penny stock traders. If you can only afford to buy penny stocks, then you should not be in the stock market.

I met at least dozens of skilled traders when I worked in the industry. They would all tell you to stay away from penny stocks.