www.investing-performance.com
Penny Stock Tips
Disclaimer
Stock speculation is very risky
Do not trade with more than you can afford to lose.
Seek professional investment advice.
This is not investment advice.
No warranties, you are on your own.
Penny Stock Tips
Penny Stocks are ultra-hazardous
There are many scams in penny stocks
Small stocks are easier to manipulate –
They are easy prey for short sellers
See my video “Anatomy of a REAL Pump and Dump” on YouTube.com
Penny stocks need promotion to move them
Penny Stock Companies
Penny stock managements usually put the investor first – right after their own wallets
They may pay themselves big salaries and perks
They may raise money by using massive dilution
–
Dilution is selling stock below its value
–
This reduces the value of your stock
They may dump their own stock on the market
Penny Stock Companies
Penny stock companies may also crush your stock value by making ruinous reverse splits
Penny stock managements may simply abandon the company
What to Look For
Look first for value
Find stocks selling below book value –
This may be impossible if information is missing
Look for low market capitalizations
Look for insider buying
Look for preparations for development –
reorganizations
What to Look For
If you have found value, then look for possible excitement
Get out your crystal ball – what will happen?
–
Anticipate and predict
–
Call the company
Is the company doing research, coming out with a new product, looking for a deal?
How Stocks Move
Stocks move in a pattern of accumulation – markup – distribution
You want to buy when the stock is being accumulated for an up move
Buy with the smart money
Avoid chasing price – look for good cheap buys
Penny stocks often have huge swings = momentum
Look at the Chart
Look for stocks with low market values
Look for stocks moving sideways in patterns that suggest they are being accumulated
Watch for upside breakouts
Do Not Chase Price
Do not chase price
Penny stocks can turn on a dime
Do not get carried away by news
Avoid stocks being hyped
Avoid spam stocks
When to Sell
Sell too soon
Sell at the first sign an uptrend is broken
Do not ask why
You will find out six weeks later when the price is down significantly – too late to sell
Do not average down in a penny stock!
Live to trade another day
Biggest Tip
Keep learning more
Professional traders stay on top of their game
–
They study everything out there
–
They know the right information is worth tons
Learn from your mistakes and your profits
Subscribe
Subscribe to these videos and my blog:
www. inesting-performance.com
Learn more from books – Amazon.com
How to Find a Home Run Stock
How to Pick Hot Reverse Merger Penny Stocks
How the Shorts Raid Your Stock, Destroy Your Company and What to Do About It
John Lux
Trader, investment banker, former OTC market maker and attorney
Lux.Investor@gmail.com
Get More Tips
Subscribe to my blog for stock pics – www. investing-performance.com Read my blogs and my books are on Amazon.com –
How to Find a Home Run Stock
–
How to Pick Hot Reverse Merger Penny Stocks
–
How the Shorts Raid Your Stock, Destroy Your Company and What to Do About it
Subscribe to my videos Copyright ©John Lux 2011