When looking at this portion of the site please remember that penny stocks account for less than 50% of our calls. It is also important to note that we no longer call OTC’s or pinks. When we day trade there is an even amount called across the board. The swing trades we call are going to be around 50% $1 – $10 and 50% $10 – $60. This is not an exact number, but you could expect more penny stock swing trades vs. day trades. This is especially true for day traders in our chat room.
What are Penny Stocks?
Penny Stocks are common stocks that trade for less than $5.00. They are traded on major exchanges, but more commonly known for trading on Pink Sheets or OTCBB. They are different than regular stocks, and have to be traded differently as well. They have severe price swings, but offer investors the potential to make huge returns in a single trading day.
How do you make money trading Penny Stocks?
Many traders are attracted to Penny Stocks for the big gains. We try to attract people who want big gains as well as change the way they think. A day trader can get a 10%-20% return in a matter of minutes then take the money and run! Why not take it and do it again on a different stock? How long would it take a large cap stock trading at $40 to move to $48? At best you are looking at a minimum of 2 days, but usually more like 2 weeks! Most penny traders wait for the 20% gain to turn into 50%, usually giving back all of the money they made in the mean time. If you trade our picks and take our approach of locking in profits and closing positions your account will EXPLODE! That being said www.picksthatmakecents.com does deliver some massive gains, but we only want our members to hold on to a position if the stock has tons of momentum. You won’t hear us telling you to sit on a position that is going nowhere which is typical of a stock promoter. Penny Stock scams are the main reason it is important to avoid getting married to Penny Stocks. Unlike NASDAQ and the NYSE, there are only minimal requirements for a stock to be quoted on the OTCBB, namely that they make their filings with the SEC on time. That is why it is best to trade these stocks and not invest in them. Companies that fail to meet listing requirements on major exchanges are usually de-listed. The same is not true with Pink Sheet stocks or OTCBB. Many investors get lured in by stock promoters and try to keep a stock for a longer period of time. Stock promoters typically send out bogus price targets while teaming up with the company on releasing news. It is usually extremely difficult to find information on penny stock companies which makes it hard to hold a position.
How do you day trade Penny Stocks?
The risk to reward ratio on these cheap stocks is very attractive for a day trader. Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed the same day they are opened. Traders that participate in day trading are called active traders or day traders. If day trading penny stocks means using $2,000 to have a potential profit of $200 in minutes then it only makes sense. Day trading penny stocks is becoming more and more popular. Here at picksthatmakecents.com we focus on making quick profits and we won’t ever try to sucker you to buy penny stocks for the long term.