Penny stocks are some examples of the most successful and exciting stocks to trade. However in spite of the excitement and potential profitability of these corporations, most penny stocks remain mostly unknown. Folks write me all of the time wishing to know what penny stocks are truly all about. Hopefully I will shine some light on the topic for you.
First discovered penny stocks 1 or 2 years back. I had been a successful trader of big cap NYSE and Nasdaq stocks but had not experimented in penny stocks before. Penny stocks sometimes trade on smaller exchanges than the Manhattan Stock Exchange. Most frequently, penny stocks trade on the OTCBB ( over the counter bulletin-board ) or pink sheet exchanges. Occasionally they also trade on the NDX or AMEX. The major difference between penny stocks and the bigger stocks is the volatility.
Volatility may appear like a unpleasant world, but professional traders know that volatility is always a trader’s best pal. In fact, you cannot make cash on a stock that isn’t moving. While a bigger stock may make movements of 1 percent to perhaps ten percent on a wild day, penny stocks make much bigger moves. Penny stocks can simply move 10-50% in a single day. I have seen examples of penny stocks making gains the size of 1000%-2000% in just one day.
There’s only one key to trading penny stocks successfully. Timing. It all boils down to timing. Knowing when to get in, and just as important when to get out.
You have to focus in on the underground penny stock community and hear what they are exclaiming. There are chat-rooms, bulletin boards, and newsletters.
When I initially began trading penny stocks I was fully clueless. It was really challenging and I kind of gave up, till I started following penny stock newsletters. They send out stories and penny stock picks. What I liked about the newsletters more than simply going into BBs, was that newsletters truly appeared to deliver in the most vital area timing. They appear to get the timing exactly right. Plenty of the time penny stocks make great moves as quickly as a newsletter covers it.
Penny stocks can be played long term too, and aren’t only for traders looking to cash in short term gains. The majority of the newsletters I have followed send out both long-term and short term picks for penny stocks.
I have seen a lot of success with penny stocks. The stories you hear about folks turning $1,000 into $1,000,000 can be accurate. The key’s to get the timing right. My idea? Start to follow a newsletter and find out more about penny stocks for yourself.
There are one or two good ones out there that I like, but I have found this one Penny Stock Alerts to be the most trusty for sending out winning picks. Penny stocks are definitely the wild west of the market, so good luck out there and trade rigorously!