What is a penny stock ? There is no official definition.
Some say any stock under two dollars, some say under five
dollars. I call a penny stock any stock that trades under
one dollar. A sub-penny stock is any stock that trades
under one penny. (.001-.01) A sub-sub penny stock or super
sub are those stocks trading in the .0001-.0009 range or
hundredth of one penny.
There are different markets that penny stocks trade on. The
OTC Bulletin (OTC-BB), over the counter (OTC) and pink
sheets markets here in the USA. In Canada there is the TSE
and TSE Venture Exchanges. There is also the NASDAQ small
Cap Market. The shares on this exchange are one dollar and
up so are not penny stocks by my definition. Also there is
the American Stock Exchange (AMEX) .The NASDAQ and AMEX are
the safest with reporting requirements that enables
investors to have access to the companies financial
filings. Pink Sheets are the most risky with no reporting
requirements .Sometimes they even gag the transfer agent so
you can't even find out the share structure, (bad sign).
Yet these risky, pink sheet stocks give you incredible
leverage. Most if not all of the super subs are pink
sheets. The super subs give you the most bang for your
buck. I look at it this way, the leverage you get with the
super subs makes up for them being more risky.I would not
call it investing with pink sheets, actually it is
speculation. With short term penny stock trading, it's all
timing. You can make money buying the worst companies at
the right time and money can be lost buying even the best
companies at the wrong time. Actually I need to say buying
and SELLING at the right time will make you money. I've
heard it said that 80% of a successful trade is in selling
at the right time.
Why trade penny stocks
Penny stocks can make you very wealthy in one to three
years if you learn how the game is played. You may have
heard investing in penny stocks is risky. Yes, it is risky
, High risk/high reward. Do not trade with money that will
destroy you if you loose it. So why do it if it is risky?
The number one reason is leverage.It is simple math.
Because the price is so low you can buy millions, hundreds
of millions, even billions of shares. At the lowest price
of .0001 you can buy a million shares for $100.00 and
hundred million shares for $10,000.00.If the price goes to
one penny you have made one hundred times your money. Your
$100.00 is now $10,000.00 and your $10,000.00 is now
$1,000.000.00 .Yes now you have one million dollars. Does
this happen? Yes it does!
Huge moves like that don't happen every day. When a stock
goes up to ten times your money it is called a ten bagger,
five times a five bagger. Ten thousand dollars put into a
ten bagger is one hundred thousand dollars put that into
another ten bagger and you have a million dollars. If you
don't have ten thousand to start out you would still have a
million starting with one thousand dollars if you had three
ten baggers instead of two in the previous example This is
not to say you can't loose money. You can! These are just
examples to open your mind to the power of super leverage.
The beauty of trading penny stocks is you can work from
home or from anywhere that has a internet connection. All
you need is a computer( I use a laptop), a internet
connection, a on-line broker and some money to start. How
much do you need to start? It depends on your situation. It
is best to start small until you have gained some
experience.
The people that I see that make the really big money in
penny stocks have a considerable amount of money that they
are trading with. The old saying, "it takes money to make
money" is true. It is all about liquidity. These stocks are
so volatile the only way to play them is trade them. When
you start with a small amount of money in your trading
account, it is very easy to get wiped out to nothing. It's
happened to me more times then I want to admit. After
getting wiped out but seeing that penny stocks have the
very real potential of making millions I started looking
for a way to generate a large amount of money to trade
with. I found an online marketing business called Wealthy
Marketer that I am using to create the trading capital I
need. This online business pulls in $900 per sale instantly
and creates unlimited passive income streams. It is a
perfect complement to trading penny stocks as it gives me
the liquidity I need and is a automated online system that
does 98% of the work for you.
----------------------------------------------------
Jeff Goodman is a Coach for Abundant Wealth. He is looking
for people who can envision creating a six figure income
with a automated online business. If you would like more
information on trading penny stocks or on this online
business you can email me at: abundantcashflow@gmail.com
http://www.wealthymarketer8.com
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