Sponsored Links

How To Use Penny Stock Prophet To Make More Money – Part 1 of 3

How to use Penny Stock Prophet – Introduction 

Most people don’t understand penny stocks. So, what I want to do here is to give you a better understanding of penny stocks and how to use Penny Stock Prophet supplied information to make more money.

I’ve been watching and trading penny stocks for quite some time now and I’ve noticed that there are some significant differences between penny stocks and “regular” small and large cap stocks… So, let’s start there. Then I’ll explain how to trade them with Penny Stock Prophet supplied leads to make more money. And, here comes the disclaimer… Penny stocks, like all investments carry significant risk of substantial or total loss of your investment.

What they don’t say in that darn the disclaimer is that they also have the potential to make YOU A LOT of Money!

The Differences Between Penny Stocks And Small/Large Cap Stocks 

The major differences between Penny Stocks and Larger Cap stock (at least from my perspective) are:

1) Capitalization which is a term (for the beginning investors reading this) that simply means the amount of money that they have to work with. There is an old expression that many, if not most, people are not aware of:

“It takes money to make money.”

The way this affects a penny stock’s prospects for success are:

(a) They usually do not have the millions or billions in reserves that can be used as collateral for loans or to meet sudden, unexpected expenses or to help the company get past the “speed bumps” of business life.

(b) They may not be able to hire the “right” people to fill key positions in their organization because they don’t have enough cash to make them leave their current opportunity.

(c) They may not be able to buy necessary equipment or infrastructure to do what they need to do to make more money.

2) While the law is the law, there are simply too many of these smaller companies for the governmental agencies to regulate them properly. As a result, there are con-artists and flim-flam promoters who will cheat and mislead… however, anyone heard of Enron, AIG, or Arthur Anderson?

3) Their trading characteristics as penny stocks are “different” than larger, more highly capitalized and higher priced stocks.

(a) Typically, they move up faster than most of their larger counter parts.

(b) Likewise, they move down faster, too.

(c) It may be months or years between moves.

(d) The size of their moves are frequently larger than that of their more highly prized cousins. Also, they are typically short term (several hours to several days).

(e) They tend to lose their new “high” value quickly and return to previous levels in a very short period of time.

(f) I think that their trading characteristics are very similar to the options and commodities markets.

Want to read Part 2? Click Here to go there…

Here’s the Blog-Roll of posts and articles on this site:

Blog Posts

share save 171 16 How To Use Penny Stock Prophet To Make More Money Part 1 of 3