Well I'm new at trading penny stocks and wanted to give it a try. I have $5,000 dollars to play around with. Before I do anything I have been looking at a few companies that peaked my interest. To name a few, ATCT, ARSD, TXXN, USCY, GETL and BOWC. What do I exactly look for first to determine which company has potential to grow. Why is it important to know how many outstanding shares the company has? If there is anything else I need to know please let me know. Should I spread the money out or focus on one company if I have a good idea the company will make it big? Any help will be greatly appreciated and thank you. Posted by Machiavelli on :
First you should read a book on trading to learn it yourself.. i'll recommend such books later in the post.. float or outstanding shares are important because of liquidity.. you want to get filled at a fast rate.. and with too little shares out there you may never get filled.. or not fast enough.. so a float of 25 Million minimum is recommended... now you didn't make clear whether you want to invest or be a trader.. because pennies aren't recommended for Investment purposes just trading.. you buy on the dips and sell in the rallies.. if your a investor then Fundamental analysis (to determine the health of a company among other things like the health of a sector, economy etc.) is best.. if your a trader then Technical analysis (to determine entry and exit points etc.) is best or a combination of both for trading.. always spread your money out to reduce your risk.. never put all your money in only one company.. i would recommend no more then 33.33% (1/3) of your bankroll in any one company... below is the books i recommend..
1. A Beginner's Guide to Short-Term Trading by Toni Turner www.toniturner.com
3. Short Term Trading, Long Term Profits by Jon Leizman
Posted by BuyTex on :
read the ARET thread from late April in <under .10> forum and learn to spot group-grope pump n dumps. Then watch the next one--from the sidelines; if you're tempted to play one, don't do it until you understand ***exactly*** how they operate unless you want to play for fun with a small amount like you might for a night on the town...except it'll be halved or worse in about 15 minutes.
And do everything Mach told you--great post. Good luck...
Posted by macdrsirules on :
Rahz, I would strongly suggest not putting all 5,000 into one company. First thing I would do is invest 20-30 percent into a company that has tremendous growth potential to invest, and the rest for trading purposes, that is to say buying a stock with the intention of selling it in the short term for a quick profit. Do not be quick to put your money in penny stocks until you have learned about candlestick charts and some technical analysis indicators, of which my name is made of. RSI and MACD are my favorites. General rules are when RSI drops below 30, (some say 25), then the stock is oversold and a uptrend is probable if there is a good support level indicated by the chart. When RSI is over 70,(some say 75), then the stock is overbought and a downtrend is likely. I would suggest going to stockcharts.com and studying everything their is on that site until you have a good grasp of the technical indicators and some knowledge of candlestick charts and patterns, and then be smart with your money. If you buy a stock for trading purposes and it drops 20-30 percent then sell it and forget it. It happens to everybody. The successful traders will not sit with a stock that they are trading and watch it sink like a rock in hopes that it will come back. Instead see if you can learn from that experience and do better next time. Hope this helps and good luck!!!
Posted by Runamuck on :
Just play around with 1000 for now till you understand how it all works.. I stood on sidelines for almost 6 months just watching picks people throw out... I also used a pretend acount for a little while to see if I was making some good choices
Posted by Runamuck on :
I read swing trading by toni turner too
Posted by Machiavelli on :
quote:Originally posted by Runamuck: I read swing trading by toni turner too
A Beginner's Guide to Short-Term Trading by Toni Turner www.toniturner.com Posted by farmgirl on :
I do not know what type of trading you are doing. I stared 2 months ago with 5K and was down to 2K in 2 weeks. I restarted slowly and am back to 4K. I just read the Idiots guide to Daytrading. It was recommended in the pennystock forum. It helped me alot. I am not daytrading right now. I am learning from swing and pennies but I learned alot. Read all you can. Posted by Machiavelli on :
Swing and Position trading are recommended for newbies over Daytrading... in case you don't know..
Swingtrading - Trading (buying,holding & selling a position) between 2 to 5 days
Position trading - trading weeks to months
Posted by trading4life on :
Out of swing tradering and day trading. Who makes more money?
Posted by farmgirl on :
I hope swing because I am still recoving from day.
Posted by Machiavelli on :
one doesnt make anymore money then the other one all things being equal.. it's just whose the better stock picker... if you can't handle daytrading emotionally because it moves so fast (the losses that is) then i would definetly recommend swing/position trading.. if your ultimate goal is to be a daytrader then at least get you feet wet at swing/position trading and build up your bankroll to $25,000 minimum for Daytrading...
Posted by trading4life on :
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