posted
Hello, first time poster and newb. Can someone kindly answer these three questions for me?
1. For penny stocks, what broker is the best? I pay 9.95 right now for TDWaterhouse... I can't see spending 10 bucks for every penny trade. Is there a cheaper way? Is there a broker who specializes in pennystocks so I can save money on commissions? Or am ok where i am?
2. I want to buy a good penny stocks book. Does anyone have an opinion of Peter Leeds? He has a site at http://www.pennystocks.org and sells a book too. Does anyone have any other recommendations?
3. Is there a successful trading club where they just simply say, "buy this", "sell that" for us newbs? I want to trade, but I don't understand much of the strategies, terminology yet. I apologize in advance for being/sounding so stupid. But I have to start somewhere. Is there a place i can go that basically gives me directions of what trades to do today? (especially one with a verifiable track record)
Thanks everyone for your help!
-------------------- Life is like a roll of toilet paper. The closer it gets to the end, the faster it goes.
posted
1. Check out Choicetrade. http://www.choicetrade.com 2. Pretty sure Bob Frey, owner of allstocks.com can recommend some books..try the main page.. 3. I would check out rickpic's thread if you havent already. Here's the link:
2. Start with these books and also look at my past posts for other book recommendations:
A Beginner's Guide to Short-Term Trading by Toni Turner (www.toniturner.com)
The Candlestick Course by Steve Nison (www.candlecharts.com)
How I made $2,000,000 in the stock market by nicolas Darvas
Reminisces of a Stock Operator by Edwin Lefevre
The Market Wizards by Jack D. Schwager
The New Market Wizards by Jack D. Schwager
3. Never suscribe to a stock "tip" site.. learn how to trade and do your own DD/research to make your picks.. your the best manager of your money.. those sites make money whether you win or lose because you are giving it to them and they can't guarantee nothing...
-------------------- Money Never Sleeps Pal.
Greed, for the lack of a better word is GOOD. Posts: 3835 | Registered: Mar 2004
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posted
Thanks guys for your informative replies. I've got a bit to read now.
Machiavelli, you said to learn to do my own DD... do you have any recommendations on how to sift out fact from fiction, what to look for in a good stock vs. one to avoid, etc.? I assume this site is probably the best place to learn all this?
Thanks again! I'm excited about getting into this. I hope I don't lose much more than I already have.
-------------------- Life is like a roll of toilet paper. The closer it gets to the end, the faster it goes.
posted
Most of the books for penny stocks dont talk about buying stocks when they have momentum or good news but tell only about fundamentals. I picked oxfv yesturday when I saw the news and today it went up 600%. It seems like news is the big thing for penny stocks so that is how ill trade them. I bought one penny stock book and it gave me some really bad advice. Here is a post by rickpick that I think is really good advice, hopefully he doesnt mind me copying it here.
http://www.stockhouse.com/news/ I posted that I had a 900% gain this month and was asked "How did you do that. I'm playing the same stocks you are" Well let me start by saying It wasn't easy!
I'm not going to list all the stocks. Many of them I posted threads on and some I played were posts from others, but I will say that out of 20 or so stocks that I played there were only 2 that I got out of with a small lose! All of the rest returned some sort of gain!
Now let me add that 900% is an exceptional month, but not undueable over again!
Heres the principal I used and I hope it helps some!
I took a beat up account I had with $740.00 left in it, and its now over $6600.00 this month!
I read every news release that came out in the AM and afterhours. Here http://www.stockhouse.com/news/ and I read every new post to Allstocks and a few other boards. I had decided that all I wanted was a gain of some kind on every stock I played. Be it 5% or 100% but that I was certainly not going to risk losing gains of any kind!
When it comes to News some things run a stock and others don't, I have learned this over time. Getting in early is the best way to take profits from a run. I sell while its running not at the top. Even though some stocks keep going once they peek for the day, many more retrace and settle, making it harder to take a good gain out.
I stick to acquisition, spin offs, very large contracts, buybacks, and news of a large caliber.
I can scan a stock in less than 5 minutes to see if the chart is down and how badly, what the O/S A/S is if its available, what past news is out, and how much volume does it trade to make it move!
because of the low amount I was starting with I decided that all in was the best means of bring up the value.
the numbers!
$740. x 10% is a $74. gain less $22. in/out commitions or $52.
add $52. to the next play!
$792.00 + 10% is a $79. gain -$22 for brocker. Add $57. to the next play.
$871 x 10% is $65. added after brocker!
These are only examples and as we all know 10% could be 30% or even 100% in a day on the right news, and at least three of my plays this month returned 100% or better, but the point is to take some kind of gain at the end of the day, be it 2% or 100% and find another breaking news story to invest in!
There is no long in penny world and if there is, what is the benefit? Holding for a month or 2 for what a 100%-1000% gain and hoping? There are stocks running every single day while you wait for gains and sometimes even just to get your original investment back. Is it worth it?
Lets say your gonna hold $500. in xyz company for 2 months! Verses playing the momentum of news worthy of a run!
$500. X 500% after 2 months is $2500. if it runs after your long hold!
$500 + 10% every trading day for 2 months compounded! Thats about 45 trading days
Day 1 $500 Day 10 you have $895 after $22. brocker fees on every round trip in/out! just under 80% gain! Day 20 you have $1874. after brocker fees or a 375% gain! I'll let you do the math beyond here!
This is all based on 10% a day compounded daily and after brocker fees of $22. per round trip! As you can see it adds up pretty dam fast! Add in one or 2 30% or higher gains and see just how fast it adds up! Even throw in a 10-20% lose a couple of times a month. It still comes out green!
My point is that only making 10% on every play every day, adds up faster than any 500% gain after a 2 month hold! With only minimal risk due to the fact that I'm not staying in beyond the momentum, and playing only the best news stocks every day.
This is not a guaranteed win/win situation, but its working for me. I have herd it over and over again how high risk should bring high reward. I say "At what cost and how many have lost"
Lets face it the penny market is a day traders market, and when we realize this it is easier to take profits and play the game.
I like trading alot more than sitting and watching!
Good Luck Rickwent
Posts: 205 | From: ca | Registered: Aug 2005
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posted
Also I should say this. In trading stock based off news if youve never done this you should paper trade to find out what kind of news works and what doesnt. Ive found that really good earnings or new products dont mean much and sometimes the price even drops with exellent earnings. Two big words I look for more and more is "contract" and "merger" in a news story. If you ever find a stock with new goverment contracts or a contract with some big company it will likely be a good stock. One thing that I have done this week that has helped me consistantly pick winners is at the close of everyday I look at all the big winners and see if there was news the night before. I examine what kind of news makes a stock go up 100-600 percent. I read all those stories and evaluate why I didnt see that before and correct my thinking so that next time I will not miss a stock like that. Earlier this week I mist a great pick because I didnt know a merger was a big thing. After seeing my mistake the next time I saw a merger (oxfv) I picked it. I am a big believer in studying past movements and finding out what caused it. The market and people tend to always react the same so what will come has already been. Learning how the market reacts to news is very important and is something to be learned. It only takes about a week to learn but it still is somewhat of a skill.
Posts: 205 | From: ca | Registered: Aug 2005
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Thank you very much! I'm happy to see that, hopefully in general, that a stock's performance is affected by news. I'm very new to the money game in general, so I don't understand most of the fundamentals. Any other helpful tips like what you just gave me (as far as specific terms, phrases, types of news to look for or avoid)?
I have to say, I'm impressed with you you guys have answered my newbie type questions with patience. Thanks to all who've responded to my probably-very-often-asked questions.
-------------------- Life is like a roll of toilet paper. The closer it gets to the end, the faster it goes.
posted
How do you know when you're too late on reacting to some news? Several times, I've seen some promising news and the stock shoots up... but as Murphy's law would have it, I usually jump in and buy near the peak of the excitement. It's kind of the "buy high, sell low" method I practice. :-) hehe. How do I keep myself from making this mistake again?
-------------------- Life is like a roll of toilet paper. The closer it gets to the end, the faster it goes.
posted
I suggest looking at all the news posted after hours for a given trading day. Most companies will come out with earnings reports after the close, and these reports will affect the open the following day.
If a stock is in the middle of a run mid-morning, I just assume I missed out and go on with my research. Never try to chase a stock.
I always try to keep my gains modest. I look to make 20-30% on a stock. If it hits 20% and starts to look like it's flat-lining, I get out quick. If it continues to go up, I missed out, but I still got 20% on my money in a single day. Try getting that at a bank!
That being said, if momentum is carrying the stock through 30%, let it go. But at the first sign that it starts to slow down (volume wise), it's time to get out.
Remember, today is not the only day you have to trade. There are tons of opportunities waiting to spring up tomorrow. Be patient.
posted
"Never try to chase a stock." Sounds like a keeper. I had to stop myself from buying ADBE this morning, because I don't want to buy at the peak. Besides, why deal with these bigger stocks, if I can learn how to trade penny stocks from you guys! :-)
I've never really watched volume (remember, I'm new at all this). But how do you know if the volume is from shares being bought vs. sold? Or does it matter? Also, when you say the volume slows down, how can you gauge this rate? I mean, do you just look at the volume one minute, then the next, then figure the difference? Is there a particular way to read volume? Or is there actually some number/formula to use or look for? Also, when we're talking penny stocks, am i correct in assuming that what would seem like a large volume in regular stocks would not necessarily be large volume for a penny stock?
Thanks for your advice. If I can make even the "modest" 20 - 30% that you talk about, I'll be ecstatic.
[ October 14, 2005, 14:23: Message edited by: WarpedMind ]
-------------------- Life is like a roll of toilet paper. The closer it gets to the end, the faster it goes.
posted
To avoid getting in to late I would get up 30 minutes early and scan all the news that came out from yesturdays close until the market open the next day. That way none of your picks have already gone up. So far, im only finding about 2 plays a week that are huge ones, like 100-600 percent. Those ones seem pretty obvious. One big one recently had a contract with radio shack and another big winner had a new goverment contract. You wont see news of this caliber everyday. I just take all the other days off and only trade the few days I see huge news. You could tell if the volume is from buyers or sellers based on whether the price is going up or down. If you really want to see whats going on you could get a level 2 which allows you to see who is buying and selling. If I am confident about the news, I may just buy it in the morning without looking at anything. The sooner the better.
Posts: 205 | From: ca | Registered: Aug 2005
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You'll just have to watch the volume count on each stock. You'll notice that most of the big players will have have constant changes in volume right after the market opens. If a stock is going to run on previous nights news, that's when it's going to happen.
You'll see volume slow down over the lunch hour, it will usually be noticable unless the stock is in the middle of a huge run.
However, if you see a stocks volume taper off at say, 10am, you may conclude that it's stalling. It may not be, but it could.
1 million shares for an unknown "runner" is fairly common. You see stocks like OXFV and AMEP that have daily volumes in the millions, regardless of which direction it's going. Look at a stocks chart to find out what "typical" volume for a specific stock should be.
Until you get a feel for the idea, stick to paper trading. Once you have a system worked out, then start using real money. There are enough tips on this board to keep you busy reading. Most of them are good tips, but you'll have to put together your own system.
Also, before you start taking advice from just anyone, monitor the boards for a few days or a week, and figure out who you should take advice from. There are people on here that have been doing this for a long time that know the ropes. There are others on here that you have to single out.
That being said, make sure that when you gamble with these stocks, it's because YOU think it's a winner. Do your own research!
The guy that says: "Man, I'm glad I didn't get into that one", still has his money to play with tomorrow!
quote:Originally posted by WarpedMind: If I can make even the "modest" 20 - 30% that you talk about, I'll be ecstatic.
Print that quote out and put it by your computer.
When you get greedy and start shooting for 80-100% gains on every play, you'll start losing money.
Posts: 451 | From: Kansas City, KS | Registered: Sep 2005
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posted
i can pretty much sum up what Tree and others have said in one sentence:
Buy on Rumor and Sell on Fact
Anyways other then trading based on news (which may work for others but not for everyone since everyone is different and this approach might not be for them) I would suggest you learn Technical Analysis which is discussed in the first 2 or 3 books i recommended... don't put all your nestegg on one idea. have several ideas and see which ones work for you and which ones don't...
-------------------- Money Never Sleeps Pal.
Greed, for the lack of a better word is GOOD. Posts: 3835 | Registered: Mar 2004
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posted
I've never really quite understood the phrase "see what works for you"... I mean, if a strategy works, PERIOD, then it is the one we should go with, right? I dunno... guess I'll figure this out as I get more experience. I'll take a look at those books and keep your phrase in mind to buy on rumor, sell on fact... that seems to make alot of sense.
Posts: 1710 | Registered: Oct 2005
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