wonder if u guys played those $0.005 penny stocks

I just started trading these penny stocks 1 year ago with 5k capital. Now my account grew to 40k in just 1 year. Wonder if u guys know the niche market here.

u guys dunno the miracle of such stocks?

what is the tricks to yr winning..

Id like to know more, sounds interesting!

Mark

My country's singapore exchange offers stocks at $0.005 which is the lowest it can go. The only increment per stock is 0.005. Therefore, a move will mean 100% gain for that stock. Basically, i just put $2000 on such stocks and wait for it to go 100%, and i will sell it for profit. This is a good method for constant income. I am managing 5 stocks each time, and i have about 6-8 hits a month.

wouldn't there be liquidity problem since you have to trade few hundreds lots ??

i looked into this. a lot of those stocks go worthless. there is a reason they are priced that low.

and you must overcome the spread. even though the stock is bought at 0.005, it probably requires at least 3 or 4 tics to turn profit.

all that said, i'll keep reading the thread. there are so many you can pick from out there (priced that low)... what's your selection criteria?

anyone interested in finding these stocks can use the yahoo stock screener (at least, as of 2 years ago)

These stocks can go well below what they are list for, when they split. Forget the name, reverse split maybe? They will take your shares, and cut them in half, and essentially the stock will remain the same price. This is the worst method out there imo ;p But if its working for you, keep at it!

time out, jlr

splitting a stock and having the price remain the same will essentially double your equity....

no?

My mistake, what I meant was, it cuts your shares in half, and doubles the stock price. The problem is, you will never be able to sell at this doubled stock price. Not only will you be near last on the list to get filled at that price, but there probably won't be any buyers at that price. Price will quickly move back to its original price, and you will have half the shares you did before. Not surprised this guy got suspended, I didn't really believe what he was selling.

If you tried penny stocks you will know that it is probably much more risky than forex. First, shares might go down to 0 (not 0 but very very close), stop losses and take profits can be jumped through easily as market opens and closes every day. Executions and fills are another problem all together as most of these penny stocks are considered exotic with low volume. I tried it demo and live before and came to a conclusion that it is crap and esepcially most free penny stock picks. Most penny stock picks work in "pump and dump" strategy. You get a good subscriber base, then after a whole bunch of people sign up send the penny stock that you already have, so all new orders will driver the price up and you get out. Making money for the list sender not for the subscriber most of the time. Take a look at all those free pick alert times and and volume spikes, and you will notice that most of the time you will not get the price that they show you.

I guess if you really want to pursue penny stocks, you need some kind of stock scanner to see which stocks are pricing to historical lows, then analyze their business model and growth potential, analyze volume (is it easy to get in and get out), look at technicals and then buy only best looking stocks. I'm not trading stocks as much more capital is needed than in forex due to leverage and account opening minimums.

Over a decade ago, I worked for a retail brokerage firm on their Nasdaq and OTC trading desks. With the evolution of markets and reduction of costs to trade so many instruments, even intra-day, I DO NOT recommend trying to play any stock under $1 ever. With a small account, you can trade Forex, E-minis, or other commodities.

The only time I might recommend buying these stocks is if through research you believed there was more value in these than quoted over a longer term. You'd have to be a very serious amateur financial analyst to determine that, or know someone inside the company.

I'd say plan for a minimum 6 month holding period.

Let's face it, people were attracted to these because they could take a small account and gamble with it. Their are better options with which to do that now, even more regulated than these "pink sheet" OTC stocks.

I recently started on forex but I have years of experience with stocks. IMO, for single US traders the transaction costs are NOT worth it. One poster said he wouldn't touch stocks below a $1. Personally, I don't even bother to look at stocks below $4. The bid/ask spread is very low in terms of cost to transactions for stocks which is why I moved to forex for a little bit more action.

Ya sure, played a lot of them in the past 3 or 4 years...OTBB and Pink Sheets...It's very very very risky...However, it's very very very profitable as well if you know what you are doing, have patience and trade each individual stock with a small fraction of your total equity...

Problems are:

1- You never see depth of the market..It's an OTC market maker market and thus you won't be able to see bid or ask quantities..Market Makers even does have the right to suspend the execution of your order for a certain time even if you can see the price on the ask side and you are willing to buy at that price, might be delayed by the market maker..

2- Your stop losses are very difficult to estimate...You might have a stop, but it might never get executed in full. When these stocks go down, they go down on thin volume and you can't sell a lot at good prices, so you have to sell lower and lower and lower etc...

3- Don't ever think of playing short sales with these beasts...Your brokre might support short sales and lend you the shares, but you might end with a very BIG loss if the price moves up fast (And believe me it happens big time)..A rise of 500% in a couple of hours is normal

4- Be ready to lose between 50%-70% of your investment in the stock if things went wrong

There are more on this, but I won't be able to specify everything, PM me if you need more info..

Best Regards,

Nader

A strategy for OTC that might be worthwhile is to play them short. Sometimes these stocks are manipulated (as in pump and dump ) and you can notice a very dramatic jump out of nowhere,then you would just wait for a fade,and catch it on the way down.

Timothy Sykes is the first person I have ever heard shorting pennystocks,but it seems to be a better approach since these stocks don't usually have much going for them.

Thanks for your input, if your saying its more risky than FOREX. Yeah count me out. FOREX is already a lifetime job as it is.

Those penny stocks can explode if you research hard.

Usually news letter would help abit to pump these penny stocks. Just dun get caught up in the dump.

With AIM, The market for UK penny stocks 30% go bust within a year.

What you guys need to remember is when shorting a stock, the most you can ever make is 100%.

The best gains your ever gonna get are from spotting a company with strong fundamentals or a niche of its own, that still has low market capitalization. Only buy and hold strategies can offer you returns over 100%.

much easier for a 20c stock to rise 400% than a $20 stock.

Even warren buffet has commented on this a few times, the only reason he doesn't still do it is that it can't be done with huge sums of money.

Take it or leave it

I recommend buying BNBR, BUMI and BRAU stock registered in Indonesia Stock Exchange, it is very cheap. Two days ago, there has been a quid pro quo between Valar plc and those Bakrie group who owned stock majority in bnbr, bumi and brau. On the other hand short Vallar plc which is now owned by Bakrie group.