woj

50 penny stock traders..

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ilnjscb

Your whole issue is commission and sitting watching the monitor. Plus you may not really grasp how a big spread (diff between bid and ask) can damage your model.

That is why pennies suck, $11 commission and large spread because of low volatility. If you are dead set against holding, try options. Unless you invest on expiry they don't lose time value over a day and have the same "what a rush" volatility of pennies but with much higher liquidity.

Pennies really are not for volatility trades. You have to know something about either the industry for the company.

A strategy you might like: Find a high volume stock trading in a stable range. Wait for a large dip (not on a "selloff" day, of course) not based on news. Buy $500 worth of calls at strike at least thirty days out but not more than ninety. Have courage.

That way you can watch your value go up and down but you stand to make some dough and the commission is less of a factor.

Obviously check all this out yourself and make your own decision. Don't buy and hold options unless you know something or can lose all your investment.

MrMaxwell

I see what you're saying about liquidity but there is plenty of it during these hype promotions, don't you think? Not always in terms of being able to go short, which sounds more difficult the more I find out about it.. But the spreads seem like they stay pretty tight when a penny has the spotlight on it... I'm obviously not going to buy a $.25/$.50 stock, you know?

When you say I have to "know something"- I hear you... the something I am trying to know is who's hyping the stock and how much weight they've got.. 99% of the time the fundamentals of the company don't matter because they seem to all be just garbage.

These CEOs (if you will) are in it to sell shares .. The hype campaigns seem to make things fairly predictable, no?

Options are interesting and seem to be very complex. I don't know about all of that fancy shit with the arabian condors and the taradactyls and whatever else... I'm sure that I will, in time, but right now I'm so new that I think I should just be getting a good basic understanding of stocks themselves. How share structures work, what makes prices move, how to read charts and so on.... does that makes sense??

I just don't see how I'm going to understand options without having the basics cold, you know?

ilnjscb

It seems counter-intuitive, but options will actually help you understand stocks. They magnify volatility so you become attuned to everything that moves a stock. Plus you have to stay involved, you can't leave options for a month. All that iron condor shit is for people with more to invest than I am sensing you are willing to risk. Those trades minimize risk but need large positions to work.

By all means, learn about pennies, but realize you can't get as much info on them as you can on MSFT, XOM, et al.

Its all great fun, but eventually you need automated tools and that is were most of us little guys draw the line.

MrMaxwell

You make sense. Thank you for your post.

And thanks to that other guy who recommended scottrade- they seem like they're a pretty good option until I can afford to have an acct at IB.

MrMaxwell

I am LOVING scottrade, thus far.

They have amazing service... I thought that them having B&M locations and all of that would make them more expensive, but, that doesn't appear to be happening to me yet.

I even got a phone call from some broad with the voice of an angel.. I saved the voicemail I liked her voice so much. I HATE voice mail- but I appreciated hers. She sounded coherent, professional, and like sex itself. Good sex. THEN I called up today to talk with them, and, that same woman answered without having to be on hold or anything. AND- she was helpful.

All of this even though I only deposited a few hundred bucks!! I really appreciate when a company treats you like a big account even if you're nothing. That means that they give a fuck.

Also- you can deposit money instantly without any extra fees (if you allow their software to login to a bank account) ..... Can't trade shares under $3 for three days but most my old broker took that fucking long to figure out they were supposed to initiate a transfer.

StickyGreen

teomaxxx

just did 10k net with this stock today:
http://finance.yahoo.com/q?s=TEWI&ql=0
well, i also lost 10k in a day last year.
owned a position before some pumpnewsletter pumped it today.
not every time you are lucky.

MainstreamGuy

If you want to make money trading with low risk, try the futures market.

It will give you around 20% per year with not much risk and low leverage.

If you want something more risky, you can try Forex, but you need more knowledge and its more risky, you could do 50% per year, but also have some bad trades and do only 5%...

MrMaxwell

It was a darth trader / stock psycho pump ... He's usually pretty damned successful, from what I have seen. How do you manage to get a good entry, though? Every time he alerts something, I can't get filled at any decent price

I took a big haircut on JALA because the $2.2M promo turned out to be fake. Got in around 16 and escaped around 09 ... That's okay though because it was a "make several hundred percent or lose 50%" type of play.

Maybe the next one will be better but these pump and dumps sure are difficult to take advantage of in terms of knowing what promos will be successful or not and all of that. Then, to further complicate things, sometimes they run the stock way down the first day and then run it up so they can claim higher % gains. Then, even worse, many times they don't even care if the price goes up because they just want to be able to sell off a billion shares at ANY price.

Some time when I'm able to short these, I think I could make some money, though. That is also very difficult from what I have read and pretty risky, but these do crash fairly reliably. 95% of all pumps do crash