Volatile Penny Stocks

[mage lang="" source="flickr"]volatile penny stocks[/mage]
Could someone educate me a little on pennystocks please?

I know they’re very volatile and one can lose their money on them. I am also aware of pump and dump schemes and the spammers who try to tout them. I have tried to educate myself as much as possible around the web but could not figure some questions out. I just had some questions about them I do not know.:

1) Can X number of shares always be bought/ sold at a given moment or can there be times where there is no one to buy them?

2) When I look on yahoo finance at a certain penny stock it will only give me a chart for 1 day and 5 days, why is that?

3) What are some good ways to measure trends for these stocks (as of now the best I could think of was historical prices)

4) Is there a way to pinpoint penny stocks, even those .01> on discount brokerage sites? I’m having trouble navigating my Etrade site to find them.

Thank you so much!

1) Lack of volume is the number one concern with Penny Stocks. With stocks priced over $5, I don’t touch them if there’s less than 500,000 shares (average) traded everyday. On the rare occasion I buy stocks below $5…… my minimum volume is much higher.

2) You’d have to mention some symbols for a good answer.

3) Learn TA (Technical Analysis).

4) What do you mean by “pinpoint”? If you mean “scan” stocks for specific criteria including price… the answer is yes. E*Trade is not one of the better brokers, they’re not terrible….. but they don’t offer enough (especially given their high price). I prefer a broker that will help me make money with a good platform & order types.

It’s scary that you’d even consider stocks below $1 let alone stocks below ten cents. Usually it takes about 3-5 years of good trading experience to consider trading penny stocks. I doubt that you even have the experience needed in risk control to be successful in this. Experienced traders (for the most part) don’t trade penny stocks. There’s very little “edge” you can have. Why trade something if an “edge” is not possible? Penny stocks are more of a gamble than a trade. That’s not a way to make money.

Penny Stocks Are Highly Risky And Volatile


This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.