Online Penny Stock Trading - Is Online Penny Stock Trading Profitable?

by John Triggerman
The reason penny stocks are looked at as a way to potentially make a large profit is because they are so inexpensive, which means high returns when the stock rises. Penny stocks are considered stocks that trade for five dollars or less. It is because of these low prices why online penny stock trading has become a fun and easy way to experience stock trading and the excitement that goes with it, without breaking the bank.

When you begin online penny stock trading you will be able to purchase stocks for mere pennies on the dollar or in some rare instances, multiple stocks for a penny. If that particular stock only rises to two cents you have just doubled your investment. Now think of the possibilities if that same stock reaches one dollar, two dollars or maybe even three dollars. There are some that shun the whole concept of online penny stock trading, but when you are cruising down the highway in your brand new sports car, who cares, let them shun whatever they want.

It's hard not to hope, when beginning online penny stock trading that you will be lucky enough to end up getting in on the "next big thing" as it's making its way to the top. It does happen, not all the time, but once in a while. However, the SEC's statement still rings true, that even though they may be penny stocks they are just like any of the other types of stock being traded on a daily basis, risky. The SEC also advises that to maintain good online penny stock trading investments is through information and education.

Good informational websites can have you investing in reliable penny stocks. It is very possible that with online penny stock trading your goals of healthy returns will be achieved. Since penny stocks are traded at five dollars or less, you as an investor don't have to put up a lot of money in order to see a good return. Online penny stock trading is also less stressful because you are not putting up the large amounts of money you would if you were buying and selling on Wall Street, where one share might cost you hundreds.

If you are new to online penny stock trading, finding a website to work for you may not be as difficult as you think. Look for one where you can subscribe and receive regular newsletters, written by people who study and know penny stocks. Some will even email you each week with their online penny stock trading picks of which stock to buy and at what price you should sell. This is what these guys do, and some are really good at it, so listen when they say buy, but most importantly, listen when they say sell.

How to know if penny stocks are going higher

by Rob Rens
A great way to identify and measure the trend of a stock is by using moving averages. A moving average is simply an average of closing prices over a specified time span. Charting software really makes your job easier as all you need to do is specify which time frame you want and the software does the rest. It will lay a smoothed line across the chart for you. You can now see whether or not a trend exists and in which direction it is heading. If the moving average is moving higher and the price of the stock is above it, then the stock is in an uptrend. If the moving average is heading lower and the price of the stock is below it, the stock is in a downtrend. As you can see, this is fairly elementary. Making money is not that difficult when you keep it simple. If you want to look at trends over a short, intermediate, and long-term basis it will be necessary to use different moving averages. For the short term trend use something between the 10 and 20-day moving average. If you want to focus predominantly on the intermediate and long term trends, you would want to use between a 18- or 21-day moving average for the intermediate trend. For the longer term trend you can use between a 40- or 50-day moving average. What you will have on your stock charts are two smoothed moving averages: one representing the intermediate trend and the other representing the longer term trend. We often use the 10-day and the 20-day moving averages. You can use just one or the other but using both will help you refine your buying and selling even more. One rule of thumb in determining whether an uptrend exists is the following: when the 10-day moving average is above the 50-day moving average, and both lines are rising, then an uptrend is in place. A powerful uptrend is in place. A trend in motion tends to stay in motion. Conversely, if the 10- is below the 50-day moving average and both lines are falling, then a downtrend is in place. Buying calls in hopes of a trend reversal would be foolish. All phases of trend point lower. Picking market bottoms is dangerous! Remember, when both phases of trend are in sync it gives us the highest probability that the current trend will stay in place. Don't fight or buck the trend. The trend is your friend! If you stick with this simple rule of thumb it will keep you out of trouble and also help you identify those stocks exhibiting the strongest trends. Buying stock and/or calls in downtrends or selling stock short/buying puts in uptrends is not a prudent thing to do. This is like stepping in front of a runaway train. Let the market tell you where it is going. There's no reason to guess. It should be pointed out that moving averages work great in a trending environment, either up or down. They are useless when stocks are in trading ranges. As you can see, it becomes impossible to determine where prices are headed. So there you have it... the key to knowing when a stock is in an uptrend or downtrend. Suffice to say, the information is priceless! Begin using it immediately and you're stock selection will improve dramatically!

Article Written by wallman Hot Penny Stocks

How To Make Money With Penny Stock

by Michael Shane
How To Make Money With Penny Stock

This is one the most frequent questions I am asked. And the easiest answer I have is follow someone who has already been successful.

I know this sounds obvious and like a cheap way to avoid the question but it is true. 99% of people who attempt to trade penny stocks on there own will fail. This isn't because they are a bad person or an unintelligent person, it is because penny stock investing is RISKY and VOLATILE, and requires hours and hours of time invested in understanding the market. With that said, penny stock investing is also VERY VERY Rewarding!

You can try to set out on your own and try to learn how to invest in penny stock, but most people will fail by approaching the market with one of the common investing strategies such as mechanical investing using market indicators, trend investing, or simple luck. Yes, believe it or not some people treat penny stock investments, and their hard earned money, as gambling and are just hoping for a little lady luck.

The best and easiest way to approach this market is to, well, follow someone who is already successful in it. And to determine who, out of the many so called "guru's" you should believe, I have developed a very good criteria that has been successful for me.

1) They should have a several year history, available for review, of beating the market.

Not just last month, or last year, but several years. This will show you that they are reliable and able to adapt to changing market conditions.

2) They should show you their losses as well as their gains.

If you find a so called investment guru who only talks about wins, run away as fast as you can because they are not legitimate and are a scam. No one, and I mean no one, invests without having an occasional loser.

3) They should allow you to try their recommendations for a trial period.

Not everyone's investment style is going to fit everyone else. When looking at a reputable investor, they should allow a trial period to see if you truly fit into the investment method that you are following. There is nothing worse then spending money on a newsletter and realizing that it's not for you and having no way to get your money back.

Follow these three criteria above and you will weed out 90% of the "investment guru's" out there. One that I highly recommend considering is Michael Cohen in DOUBLING STOCKS.

What You Don't Know About Penny Stock Exchanges

by Christopher Smith
Most people think of the major stock exchanges when trading stocks comes to mind. The New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations (NASDAQ), and the American Stock Exchange (AMEX) are among those that first come to mind. A penny stock is a low ticket security for companies that are valued at under five hundred million dollars and often trade in low volumes. These stocks also trade on 'Over the Counter' exchanges such as the OTCBB or Pink Sheets.

The very fact that penny stocks trade at such low volumes increases the risks involved in investing in them. The Securities and Exchange Commission urges potential investors in penny stocks to be aware of the fact that the low trading volume of these stocks make it likely that in times of needs buyers will be rare if not impossible to find. Finding accurate quotes for pries is also difficult which increases the possibility of the investor losing his entire investment.

Despite the risks involved, penny stocks are often attractive investments to investors for various reasons. If you are new to investing and looking for the chance to return a high yield for a relatively low investment you are likely to come across some penny stocks. The attraction often lies in the fact that at such low prices any changes are often measured by the hundreds of percent this means that your investment can literally double in one or two days time.

On the other hand, the price of penny stocks can drop just as drastically and equally fast. Those who are inexperienced investors would do well to avoid penny stocks until they have a better understanding of how things work. It is also important to note that because of the relatively low 'worth' of the companies that are often listed on the OCTBB or Pink Sheets they are often considered questionable investments. Some of these companies have such a limited financial history that no accurate determination of their actual value can be made. Many of these companies are either very new or dangerously close to bankruptcy.

There is also a strong potential for fraud with some buyers artificially 'enhancing' or driving the costs by buying large amounts of stocks and raising the perceived value of essentially worthless stocks. Most investors who fall for this loose many when it comes time to sell.

It is important to remember that not all of these companies are frauds and many of them have a great deal of potential. Some are new businesses that are working hard towards their goal of earning a spot on the larger exchanges.

Do your research in order to decrease your risks of landing with a declining or dishonest company. Investors are often convinced that one good investment can make them a nice tidy profit. While this is true it is better to invest in a company that is showing slow and steady growth than one you are hoping will sky rocket over night. Take the time and do your research rather than gambling with your investment.

Penny Priced Stock Options

by Mark Crisp
Sometimes investors feel that they do not have sufficient leverage. When this happens, they find it difficult to use the opportunities that present themselves and make a profit from them. Penny options are one good way to gain leverage and build your portfolio at the same time.

A lot of stocks are priced incrementally - for example, at five or ten cent increments. Penny stock pricing methods do not use increments but vary by pennies. Traders can increase their leverage with penny stocks because they can get into trading with less capital to start with and if their stocks should fail, they have not lost too much.

With penny options, you can make a profit in a relatively short time because you are playing in a smaller field and with less money. A lot of people like the penny stock idea because you cannot lose more than your initial investment. Options, as opposed to underlying stock, do have some drawbacks though. Penny options can change massively in a short period of time. These might be positive changes for you or negative.

It is important to find out whether a penny option would suit your requirements. A penny stock might be cheap but perhaps the liquidity does not suit your needs. You have to find out what the brokerage cancellation policy is too. Also, ask what the time decay of the options is before purchasing them. Before you buy anything, ask yourself for how long you plan to be trading the options. You should buy options that expire well after when you plan to sell, so if you want to trade an option for 10 days, choose one ending in 30 or 40 days.

If you already decided that you are going to trade for one day only, there is no need to worry about expiration dates. The front month option should work fine for you in this instance. Penny options are not actually that common these days. Traders and crafty brokerage firms use the method so others should catch up soon.

You have to be patient when trading penny stocks. The options can move quite a lot in just a few minutes so if you are too nervous, you need to relax rather than panic. If you are prone to panic and stress, maybe penny options are not a good idea for you.

If you are interested in increasing leverage but do not have enough capital to begin with blue chips, penny options are a good way to start.

Best Stock to Invest In: Penny Stocks Uncovered

by William Foxx
So, you're looking to secure your future, huh? And the best way you thought how to do so is by investing in the stock market. Well, let me tell you something... good choice! The business of stock trading and stock investing is a very rewarding one indeed, but only if you dedicate enough discipline and hard effort is put into understanding it. I guess your immediate question would be, which is the best stock to invest in?, right?

I could talk to you about all the popular and good stocks to buy out there, but that's just the problem... their too popular. From my own experience I can say that one of my best stock picks was of a small company back in '89... now one of the - if not the most - powerful multinational corporations in the world. I'm not going to reveal the company's name though, but at the time I bought them, is was selling penny stocks. It cost be around $0.70 to buy one stock, so I bought a bunch of them. It was risky but, then again, I only spent around $400 bucks.

The Early Years

The first year, my little NASDAQ penny stocks went up around +0.30. That means they were up to $1.00! that was good knows! But I wanted them to go up a little further and then sell them so I could make the difference... To my surprise they dropped to $0.90 - something like that. But this wasn't a bad surprise for me, somehow I ended up buying a whole bunch more... spent around $2,000! To this day I don't know why, but I took the risk!

For the next 10 years the stocks skyrocketed and I was selling and buying and selling and buying... From a bunch of day trading penny stocks, I made a great deal of money, but the thing is... by 1999 they weren't penny stocks anymore! Their price had gone up to a whopping $50 per stock! How about that! Life was good! And still is... Thanks to that moment!

In Short

What I'm trying to say here is, the best stock to invest in isn't always the one that's worth hundreds of dollars. Sometimes you just have to go for it and take the risk with penny stocks, and sometimes with enough research you know the penny stocks are going to explode some day and make you a real fortune!