What Is The Best Strategy To Make Money w/ Penny Stocks?

4 Comments

1. Karen says:

   March 12, 2010 at 02:09

   The best strategy to make money with penny stocks — prayer. Save your money until you can afford to risk it on a better quality company.
2. Josh5v says:

   March 12, 2010 at 02:57

   The best strategy to make money with penny stocks is to not buy them.
3. A nobody says:

   March 12, 2010 at 03:17

   There are universal principls for trading/investing whether they’re penny stocks or not.

   Here are some of the “universal” rules for investing/trading
   -The first and primary rule should be never enter into a trade without knowing when and where you’re going to close the trade.
   -Never invest on emotions; feelings have no place in determining investments.
   -Only buy stocks with real sales and real earnings, does not apply to pennystocks since they are crap shoots and are traded as fun things and not as investments.
   -Only consider buying stocks with each of the last three years’ earnings up 25%+, return on equity of 17%+ and recent earnings and sales accelerating.
   -Avoid cheap stocks, buy only higher quality stocks selling $10 a share and higher.
   -Never buy if the firm is filing or in bankruptcy.
   -Learn how to use charts to see sound bases and exact buy points.
   -Stay with up trending stocks, never buy on down trends. This does mean “the trend is your friend”.
   -Always buy companies with new ideas, styles or products.
   -Cut every loss when it’s 8% below your cost. Make no exceptions so you can always avoid huge, damaging losses. You can always average “up”..
   -Follow selling rules on when to sell and take profit on the way up.
   -Never average down
   -Always sell when management cuts sales or earnings forecasts
   -Buy when market indexes are in an uptrend. Reduce investments and raise cash when general market indexes show five or more days of volume distribution.
   -Pick companies with management ownership of stock.
   -Select stocks with increasing institutional sponsorship in recent quarters.
   -Current quarterly after-tax profit margins should be improving, near their peak and among the best in the stock’s industry
   -Don’t buy because of dividends or P-E ratios.

   When you invest/trade in penny stock you should never put up more than you can afford to loose and you should assume you will loose it all. Unlike regular securities, penny stocks usually do not let you use risk cutting procedures (options and/or stop orders) since most are not traded in a regulated market place.

   They say when you buy securities you have a 50%-50% chance of making money, when you buy penny stocks you have a 50-50-90% chance, 50-50 chance of making money and a 90% chance of loosing money.

   When buying penny stocks, like any other security investment, you never invest 100% of you investing capital. Penny stocks are fun to trade, but you should never count on them to be considered part of your primary investment objectives.

   All that said, here are some websites that you will find helpful
   http://www.smallcapinvestor.com/
   http://www.stockwire.com/
   http://alphaking.com/
   http://www.otcstockexchange.com/
   http://www.mcapstocks.com/Default.asp
   http://www.pinksheets.com/pink/quote/index.jsp
   http://ragingbull.quote.com/cgi-bin/static.cgi/a=index.txt&d=mainpages
   http://www.swingtrades.com/
   http://www.thehotpennystocks.com/stock-picks
4. Answer Me says:

   March 12, 2010 at 03:45

   The best strategy to make money with penny stocks is to stay away from them and try making money with non-penny stocks instead.