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A Guide to Penny Stock Trading

Penny stock trading is an alternative income stream that allows individuals to purchase stocks for very low prices. Under the Securities and Exchange Commission, any stock that is priced at less than $5 per share qualifies as a penny stock. Penny stocks can be purchased through a broker or directly, even when they are not listed on the major exchange sites. They have been a source of controversy, but they can also be an excellent investment when purchased intelligently.

One of the big benefits of penny stocks is how quickly they can go up in price. There have been more than a few successes with penny stocks. This is because most of the time, penny stocks come from brand new companies or companies that are about to reinvent themselves. These companies might be poised to develop the next big product. When they do, the investors that paid $2 a share can see their share’s value go up more than 100%.

True Religion Makes True Believers of Penny Stocks

In a way, penny stocks are like getting in on the ground floor of a company. Take the story of True Religion, otherwise known as TRLG. This apparel company is well known in the fashion world now, with celebrities being seen everywhere in True Religion jeans. However, when it started out, TRLG stock could be had for as low as $0.67 a share. Then, the jeans caught on, the brand gained name recognition and in only nine short years, these shares of True Religion stock were worth $32 a share. This led to a 4676% return on investment.

When it comes to penny stocks, that’s what people want to see happen. Typically, penny stocks are bought in bulk and investors hope the new company can catch on and resonate with the public. If it does, and that new company makes money, the investors can see huge returns on their investment.

Another case where someone might see penny stocks being traded is when a company is nearing bankruptcy. In these cases, investors might be hesitant to buy because it appears that the company might soon go out of business and they’ll be left with nothing. But savvy investors know that this type of trading is the very definition of buying low and selling high. More than a few companies have returned from the edge of bankruptcy, only to become more popular than they ever were.

Pier 1 Imports’ Comeback Story

Take the story of Pier 1 Imports as an example of a company coming back from a major setback. Pier 1 Imports was a popular furniture and home accessory store in the 1990s and early part of the 2000s. Then, when the real estate bubble burst, it saw its stock prices go from an all time high of $25 a share, all the way to a low of $0.11 a share.

In this case, Pier 1 Imports didn’t file for bankruptcy. Instead, they pushed through the tough economy and stuck to their guns. When the economy and stock prices started to rebound, Pier 1 Imports rebounded as well. Their stock prices went from $0.11 to $20.64 a share, resulting in an 18,500% return from their all time low.

People who trade penny stocks are looking for companies just like the two examples listed above. The opportunities might be found in investing in a new company, or an existing one that has hit a slump. When these opportunities are found, penny stock traders are poised to make money by buying these stocks in bulk.

If someone had chosen to buy 5000 shares of stock at the all time low for Pier 1 imports, they would have spent $550. This hardly seems like a large amount to risk. If they’d held on to those 5000 shares until the Pier 1 Import stock improved, their overall share value would have been $103,200. In less than 5 years, they would have made more than $100,000 from a $550 investment.

That is the very essence of penny stock trading. It’s buying extremely low, and selling high, to make huge overall profits on investments. Of course, the huge profits like the ones listed above aren’t guaranteed. Instead, it’s a matter of making wise decisions and vetting companies in order to find the optimal times and companies to invest with. It’s a matter of staying up to date on penny stock trading picks and getting in on the opportunities early on.

Penny Stock Trading Picks

One of the biggest reasons people fail to make money on penny stocks is because they’re not informed. They don’t know which companies are poised to breakthrough or make a comeback. By the time they find out, the stock prices have already been driven up because people who did know have already taken advantage of the opportunity.

Penny stock trading picks are the recommended buys in the stock market. These are the stocks that for some reason or another, are starting to climb in price. Whether it’s a technology company that is poised to receive a government contract, or an apparel company that just received a celebrity endorsement, for one reason or another the stock price is steadily rising and expected to rise right out of the penny market.

On the other hand, sometimes, these stocks might be rising for nefarious reasons, like someone is trying to artificially inflate the price in order to get others to buy. Then, that individual will sell their stocks and everyone else’s share values will drop as well.

How do investors avoid this? Is it possible to know the difference between a stock poised to explode, or one that’s being artificially inflated? It is, if the investor chooses the right penny stock trading pick provider. How investors get their stock advice usually depends on how they plan to buy their stock. There are three major ways this is done.

  1. Stock Picker Plans –In this case, the investor would pay a monthly fee and be given a listing of stocks picked by a stock picker. They can then either direct buy them, or place orders through a discount broker.
  2. Discount Brokers – A discount broker will put in buy and sell orders for the investors, but will not provide investment advice. This service is available at a lower commission for investors and will allow investors to purchase stocks not sold to the general public.
  3. Full Service Broker – A full service broker will provide both investment advice and handle buy and sell orders for the investors. The commission is higher than with a discount broker. Full service brokers don’t often deal in penny stock

When it comes to penny stocks, the key to getting the right stock picker is finding a company that specializes in these stocks, while managing to keep pricing and commissions down. With how quickly penny stocks move, it’s important to pick a flexible trading platform and someone with a lot of experience in day trading, who has made a lot of success with it.

Two places that are great solutions for someone looking for a stock picker include Jason Bond Picks and Penny Stock Prophet. Both these sites offer platforms that keep investors up to date with information on trading, as well as opportunities to talk to other investors. When choosing between the two, it’s important that investors look at their own needs and experience to see how much help they might need.

Jason Bond Picks vs. Penny Stock Prophet

When trying to decide between these two stock pickers, it’s important to look at five different areas. These include;

  • History of success
  • Ease of use
  • Level of service
  • Company reputation
  • Proven strategies

History of success – When looking at both companies, it’s important to review their track record in order to be sure that they are capable of delivering results. Here are the most recent successes for each company;

Jason Bond Picks – Over the past few months, Jason Bond has successfully picked multiple high profit stocks and recommended them to investors in his program. Some successes include his pick of Corporate Resources, which saw a 94% return over a period of only 3 days. Another was Liquidmetal Technologies, which saw a 100% return in only five days. Finally, there was Zynga, which gave it’s investors a return on their investment of 13% over a period of three days. Jason Bond clearly has a history of picking successful stocks.

Penny Stock Prophet – In one of their most recent success stories in May of 2014, Intregrated Cannabis Solutions (IGPK), was trading at $0.17 per share on a Sunday, and by Monday, traded at $0.68 by the end of the day. Of course, now it’s trading at around $0.01 per share so hopefully investors were warned to get out quickly.

Ease of use – Just because someone might be a savvy investor doesn’t mean they have an easy to use platform. When day trading, time is of the essence. It’s important to provide a platform that’s easy to use.

Jason Bond Picks – This platform offers training videos, a chat room, text message and email based alerts and up to the minute information that can be received by various mediums like cell phone, emails and more. It is as simple as using a website.

Penny Stock Prophet – This system is almost entirely email based, and mainly involves reading emails and following links.

Level of service – A good picker will offer more services than just a simple newsletter or email. Investors don’t want to just get subscription based emails alerts. They need a place to discuss investing options with other investors, review company balance sheets, and more.

Jason Bond Picks – This platform features real time and text message alerts of various stocks that are suspected to go up. A daily watch list is also sent, with stocks to watch, though they might not be recommended for immediate investments. The platform also features a chat room to get easy access to other investors working with Jason Bond. Finally, the site gives training videos and articles to help investors learn to pick their own stocks. This is an all inclusive platform that is easy to use.

Penny Stock Prophet – For a lifetime subscription fee, investors get a newsletter with the picker’s stock recommendations for the day, along with reasons why the company is expected to take off. When it comes to ease of use, reading a newsletter couldn’t be any easier. One thing to be noted is that these newsletters frequently include disclaimers in small print, which can be difficult to read.

Company reputations – There are many charlatans in the stock picking world, but luckily it’s easy to find out who those charlatans are by reviewing their reputations online. Companies that have poor reputations, that consistently recommend scam stocks, will be quickly exposed online. Partnering with a company with a strong reputation is important in the penny stock investment world.

Jason Bond Picks – Jason Bond appears to have a good reputation in the financial world. Other traders recommend him and discount brokers recommend him as well. There are many reviews of his service on the internet. One notable thing missing from Jason Bond’s site is all those ‘get rich quick’ flashy banners and promises of instant success.

Jason Bond is very open about the downfalls of trading and puts a strong focus on research. His company has been featured on various respected financial websites including the Wall Street Journal, Yahoo Finance, and Seeking Alpha.

Penny Stock Prophet – The Penny Stock Prophet doesn’t appear to have a strong reputation online. Their website landing page immediately takes investors to a hard sell site. To get further information requires joining the email listing. This site is not as transparent as Jason Bond’s, so it’s hard to determine the reputation of the stock picker.

Proven strategies – There is no one get rich quick strategy that always works in the stock market. Instead, good stock pickers regularly analyze and update their stock picking strategies.

Jason Bond Picks – Whenever Jason Bond picks a winning stock, he links to an extensive article, complete with financial papers and balance statements that show exactly how he came to the conclusion that the stock price was going to go up. His strategy is based on research and real time information, which anyone could obtain, but which he has the knowledge to use.

Penny Stock Prophet – The Penny Stock Prophet strategy appears to be some secret formula, which is not disclosed, but which the stock picker, James Connelly, reports has allowed him to make millions in the market. The strategy is not transparent and appears to be a closely guarded secret used to put out the stock pick emails.

When looking at those five areas, it’s easy to see that Jason Bond Picks come out ahead. The key to making money on penny stocks isn’t a secret strategy or formula. Instead, it’s extensive research into the potential companies which allows individuals to choose the right stock. It’s not enough to simply rely on the stock picker’s choices. Instead, investors must be savvy enough to request background information. Penny stocks can be a risky game, but with the right stock picker, they can also be a lucrative one.

 

Sources;

https://www.guerillastocktrading.com/JB-Stock-Alerts/

http://www.beststockpickingservices.com/jason-bond-picks-review/

http://primarystocktrading.com/jason-bond-picks-review/

http://reviews.chymcakmilan.com/honest-penny-stock-prophet-review

http://www.pennystock911.com/penny-stock-prophet/

http://www.investortrip.com/penny-stock-prophet-review/

http://www.benzinga.com/trading-ideas/long-ideas/14/01/3014935/9-one-time-penny-stocks-didnt-stay-that-way

 

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