Stock Newsletters

Stock newsletters are a great place to start your search for that perfect penny stock.

Online Stock Promoters

Stock promoters and their websites number in the hundreds, if not thousands. All of them touting that next company that is going to blow up overnight.

The goal of many modern day investors is to find hot penny stocks small capped shares priced cheaply and with the potential for enormous growth. If you look around today’s market you will find many that have skyrocketed, and investors who got in at the right time have made enormous profits on them. The key is timing, and though it is not everything in investing, it is a big part of making money from penny stocks. There are certain strategies one can employ to locate these potentially profitable inexpensive shares, on is to research the marketplace looking for well structured companies with potentially popular products or services, the other is to subscribe to a penny stock newsletter that can alert you to potentially hot penny stocks.

Subscribe to a Penny Stocks Newsletter or Forum

A beginner can become quickly overwhelmed or confused when trying to choose a penny stock into which they might pour their life savings. The potential for loss is a high one, so it is better to accept the guidance of a stock picking service such as Xtremepicks.com, who produces a penny stocks newsletter with a proven track record of selecting profitable penny stocks. You may also wish to join one or two penny stocks forums and interact with other traders. Find out what the buzz is; what stocks other people are talking or even raving about. Once you have a few months experience under your belt, you can begin to apply your own technical analysis to choose penny stocks.

Technical Analysis of Penny Stocks

Technical analysis is basically a form of chart monitoring to look for stocks with the potential to “breakout” or increase in value very quickly. The history of a stock charted price (or even a similar stock that has broken out before) is monitored over a particular period of time the longer the better to establish potential trends or breakout points. Because this is time consuming and tedious research, many traders use a type of software which scans prospective penny stocks. Investors can choose specific criteria for the software to look for such as penny stocks with especially or unusually high trading volumes and other criteria that can identify potentially profitable penny stocks.

Strategize Using Penny Stocks Fundamental Analysis

There are fundamental criteria that can help to identify the hottest penny stocks on the market. These will include the company’s financial status and structure, its assets and liabilities, market share, potential for growth and other aspects of its organization and financial make-up. Once you get the hang of fundamental analysis, you will be able to identify penny stocks that are under valued and thus good investments. Generally a penny stock with a market cap that is a good way below what you have calculated to be a fair valued for the business offering the shares. This can be a long and tedious process, but one that is essential if you want to weed out the winners from the losers. As you become more experienced, you will learn to look deeper into a company’s financial affairs, and consider additional criteria such as demographics, regulations, and even geographical location and meteorological data.

Once You’ve Found Penny Stocks Worth Buying

If on completing the required analysis you find a penny stock worth investing in, you’ll need to determine if the price is right. The secret to successful trading in penny stocks is to keep your cool, and not let your emotions get the better of you. Many novices make the mistake of “chasing” a penny stock increasing their offer time and time again in order to secure the stock. If you miss out on an initial big run, just stay calm and wait for the market to settle. Buying pressure will eventually drop, and accordingly so will the price. It is at that time whether you should consider whether or not the price is still acceptable to you, but this is a better strategy than chasing, which only leads to buying shares at an inflated and false value. Buy low and sell high should always be the basic strategy of any investment.

Selling penny stocks could be a little more complicated. Once you own the shares your money us at risk, and consequently the longer period of time you own them for, the more risk you are exposed to. Obviously you’ll want to sell them at a price at which you’ll make a profit, but that price must also be high enough to cover any commissions. To consistently make money trading penny stocks it is often recommended to take profits almost immediately. Letting a stock run its course in the hope of cashing in at its peak is tempting, but there is a lot to be said for the old saying “a bird in the hand is worth two in the bush.”

There may be times when you catch a penny stock that continues running for a long period. This could enable you to make huge profits, and if you have such an experience congratulations. This is not an easy feat however, and you’ll find that consistent profits of ten to twenty five percent can add up quite rapidly. Likewise you should make use of limit orders when trading penny stocks. Keeping your losses to a maximum of ten percent can make it much easier for you to recoup those losses when you catch the next hot penny stocks.

Happy Trading,

Max Gordon

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Max Gordon has a penny stock newsletter and writes articles on penny stocks, penny stock trading and penny stock picks.  He gives reliable advice on how to make money with penny stocks and where to obtain the very best penny stock pics.

One of the top technical indicators penny stocks traders use to make millions is Bollinger Bands. Some investors even use Bollinger Bands exclusively in their trading strategy. What is this apparently important technical indicator, and how can it help you to make millions trading penny stocks?  The same way it helped its inventor John Bollinger that’s how! John Bollinger is a famous technical trader and financial analyst; in fact he is the first person to ever earn the dual qualification of Chartered Market technician (CMT) and Chartered Financial Analyst (CFA). He is currently the president of Bollinger Capital Management, an investment management company founded by him that provides technically-driven financial management services to individuals and institutions. His Bollinger bands can be invaluable to anyone trading in penny stocks.

Bollinger developed Bollinger Bands during the early 1980s, and they are basically lines drawn on a chart defining highs and lows of penny stocks on a relative basis, in this case using standard deviations below and above the twenty day moving average. A mathematical formula is used to ensure that ninety five percent of data falls between the two bands, but the favored indicator of experienced investors is known as “walking the band or riding the upper band. If a penny stocks price closes above the Bollinger Bands during an uptrend, it could be an indication that the trend will continue rather than reverse. This has been a successful indicator used by many traders, as at a glance one can determine if penny stocks are trending sideways, upwards or downwards.

Strategies for Trading Penny Stocks Using Bollinger Bands

One simple and effective strategy often used by traders is buying on the break of the bottom (low) band. In every single instance where a trader made money using this technique the break of the bottom band was in territory which indicated the stock was oversold. Penny stocks that follow this pattern face heavy selling pressure, but generally that selling trend is corrected quite quickly when the middle band is broken and the price heads towards that of the upper. If other traders don’t recognize the signs and begin buying however, the stock could continue its decline, so due diligence should always be exercised when trading penny stocks. Company news and industry sector announcements should be consulted to determine if the stock will attract the interest of other savvy traders.

Earlier “walking the band was mentioned, and indeed this is the most popular method of using Bollinger Bands amongst traders. If the price of a stock is “walking along the upper band, it can provide a good indicator to those wishing to trade penny stocks according to a trend or specific direction. The idea is to make your trade based on the assumption that the trend will continue upward, but may beginning g investors panic at that point and begin to sell. The fact that the price breaks the upper band doesn’t necessarily indicate a reversal, and conversely, breaking the lower band doesn’t automatically mean that the price will turn upwards. Bollinger stated this himself, and millions have been made by traders who continued with or traded in the direction that a stock was moving above the upper band.

Bollinger Band Basics

There are some basic rules that apply to trading penny stocks according to Bollinger Bands. They are not hard and fast rules due to the nature of the markets and investing, but they are common occurrences which generally indicate profitable directions to trade in. First is that; when penny stocks are above the middle Bollinger Band the stock is considered to be bullish, and when it is below the middle line bearish. It is always best to consider a chart for at least 5 trading sessions. When the price is moving at a 30 – 45 degree angle and breaching the upper Bollinger Band it is possible to generate huge profits. Keep an eye out for when the top and bottom bands are moving up together, as that could indicate an explosive breakout.

Bollinger Bands as you can see can help you to make huge profits trading penny stocks. Of course developing the instincts to know when a huge breakout might occur takes years, and therefore it is recommended to subscribe to a penny stock newsletter before making any actual trades in penny stocks. That way you can receive hot penny stock alerts from seasoned traders like the team at Xtremepicks.com who have already done the research needed to affirm the value of rising penny stocks, and who have the track record to prove they have the know how.

Happy Trading,

Max Gordon

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Max Gordon has a penny stock newsletter and writes articles on penny stocks, penny stock trading and penny stock picks.  He gives reliable advice on how to make money with penny stocks and where to obtain the very best penny stock pics.

Penny Stock Newsletter

OTC, also called over-the-counter or off-exchange trading is trades performed between two parties outside of exchange trading such as New York Stock Exchange, NASDAQ, etc. The two parties will agree on a price of the financial instrument being traded, such as a stock, bond, commodity or derivative.

OTC stocks are appealing to small companies with less than $1 million in assets because it is relatively cheap to get listed, and the regulations are less stringent. There is a wide variety of companies traded in the OTC markets. Some are well funded and have growing businesses, others suffer from poor management or lack of funding. While OTC securities do have a higher risk level than blue chip stocks, the rate of return can be multiples over any other investment. Due diligence and research are key before jumping into the OTC stock market.

OTC stock information is provided by a few inter-dealer services. Over the Counter Bulletin Board (OTCBB), http://otcbb.com,  and the Pink Sheets supply quote information to investors. OTCBB is operated by FINRA (Financial Industry Regulatory Authority).

OTC stocks are not traded in a formal stock exchange, but rather between individual brokers. Individuals called “Market Makers” create markets for OTC stocks by listing them on the quotation services that brokers have access to. To trade OTC stocks, you must use a broker to make the transaction. The broker can either be a physical person, or an electronic broker such as E-trade, Ameritrade, etc.

There are several levels of requirements for reporting by OTC companies. OTCBB must  follow guidelines and requirements issued by the U.S. Securities and Exchange Commission (SEC). Stocks with this designation will have a .OB after their symbol.

Another type of OTC stock is called “Pink Sheets” or “Pinks”. OTC stocks with this designation will have a .PK after their symbol. These stocks have no reporting requirements, and are generally seen as less trusted for that reason. The SEC does not regulate the Pink Sheets.

Before investing OTC stocks, it is important to do thorough research and dig deep. Go tot he company website. Read their press releases. Call their investor relations phone number. Ask questions. The SEC website, http://sec.gov, will also have all of the company’s documentation and filings, including financials and statements by the management about future plans.

OTC stocks can be a risky investment, because of the small size of these companies, the lack of regulation standards and minimal public information. Some OTC stocks are also not traded that much, so you need to make sure that there is sufficient liquidity in the market in the case you would like to sell your stock.

Some of the pitfalls to watch for:

• extreme volatility in price
• small “float,” or value of shares outstanding pertaining to the company
• Fraudsters often target over-the-counter securities to manipulate them for profit. False rumors can cause OTC shares to advance sharply, before the unscrupulous “tipster” liquidates his position, in a “pump and dump” scheme.

Before putting any money in the market, whether OTC, NASDAQ, NYSE, etc., always setup a “paper trading account” and learn the ups and downs of the market through “fake” trades. This will allow you to develop your trading strategy without losing money in learning those hard lessons.

We’re sure you’ve been quite aware of the recent craze on Wall Street when it comes to coffee companies.

The entire sector has been on fire over the last couple of weeks.

Just look at the winners:

• JAMN from 0.60 to 6.50 +983%
• BCCI from 0.01 to 0.84 +8,300%
• HCEI from 0.005 to 0.41 +720%
• JCOF from 0.05 to 0.70 +1,300%
• CNOZ 0.015 to 0.15 +1,000%

Why are these stocks going through the roof? The main reason is the price of the raw commodity: coffee.

Take a look at this chart of coffee pricing for the past year:

You can quickly see that coffee prices have sky rocketed in the past year, and so have the end retailers as their profit margins have grown in step with this price curve.

Commodity prices have exploded across the board, and so have the producers and retailers share prices.

The other side of the equation is that fact that people are not going to give up their coffee. Most people have one thing on their mind when they wake up: get some coffee. Did you know that over 2.25 billion cups of coffee are consumed in the world every day?

Check out this article on coffee at Wikipedia: http://en.wikipedia.org/wiki/Economics_of_coffee It has a lot of interesting information about the flow of coffee from producer to your coffee cup. All great information in understanding where you can monetize these gains for your own portfolio.

The most important thing any trader can have in their arsenal is information, knowledge and a thorough understanding of the market space they are trading in. That way they can see the opportunities BEFORE they happen and capitalize on massive gains, such as the ones with the recent coffee companies above.

Other possible opportunities are available in other commodity sectors such as gold, lithium and rare earth minerals. All of these commodities have seen a recent surge in pricing which makes junior mining companies look favorable given the larger profit margins that are possible with a mineral deposit find.

Do the homework. Dig deep. The rewards will be yours.

To be an effective trader, you have to know the vocabulary.

The basics are what type of position you hold in a stock. There are basically two: long and short positions.

What Does Long (or Long Position) Mean?

The buying of a security such as stock, commodity or currency, with the expectation that the asset will rise in value.

What Does Short (or Short Position) Mean?

The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.

What Does Short Squeeze Mean?

This occurs where this more demand for a stock, causing the stock price to go up. When this happens, traders with a short position will be forced to either sell their positions or cover by purchasing the stock. Eventually when enough “shorts” start to buy stock, the price of the stock will be pushed even higher.

Short squeezes occur more often in smaller cap stocks with small floats. A short squeeze is great for traders who are long, or looking for the share price to go up.

On the other side of the coin is what is called a Long Squeeze.

What Does Long Squeeze Mean?

The long squeeze is what happens when a stock’s price crashes. The saying, “everyone running for the door” applies here. As the stock price decreases, those with long positions will try to sell their positions to either take profits or avoid losses.

You have most likely heard of other classifications for stocks such as small cap, micro cap, nano cap, mid cap. Below I will offer some definitions of each classification.

Let’s first start with the smallest, nano cap stocks.

What Does Nano Cap Mean?

This usually referes to public companies that have a market capitalization below $50 million. For example if you multiply the number of shares in the company, times the share price, that will give you the market capitalization.

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Have you ever seen a penny stock symbol with more than four letters?

Those extra letters at the end of some penny stock symbols actually mean something. Some of these as a trader you should know about, as they can directly impact your ownership of the said penny stock. Penny Stocks are traded on the Nasdaq market, which uses 4 letter codes for its companies. Sometimes you will see a fifth letter tacked onto a stock symbol. These letters, as defined below, are an identification of an issue with a particular penny stock.

For example, take the company COUGF. That fifth letter, “F” in this case, is an indication that the company is foreign.

Below are the Nasdaq codes and their corresponding meaning:

Nasdaq Stock Codes

• A – Class A stock
• B – Class B stock
• C – Issuer qualifications exceptions*
• D – New
• E – Delinquent in required filings with the SEC
• F – Foreign
• G – First convertible bond
• H – Second convertible bond, same company
• I – Third convertible bond, same company
• J – Voting
• K – Nonvoting
• L – Miscellaneous situations (depositary receipts, stubs, additional warrants, and units)
• M – Fourth preferred, same company
• N – Third preferred, same company
• O – Second preferred, same company
• P – First preferred, same company
• Q – Bankruptcy Proceedings
• R – Rights
• S – Shares of beneficial interest
• T – With warrants or with rights
• U – Units
• V – When issued and when distributed
• W – Warrants
• Y – ADR (American Depositary Receipt)
• Z – Miscellaneous situations (depositary receipts, stubs, additional warrants, and units)

* The letter “C” as a fifth character in a security symbol indicates that the issuer has been granted a continuance for a limited period by Nasdaq under an exception to the qualification standards.

It is important when trading stocks to be aware of that fifth letter and determine is purchasing that penny stock is worth the trouble it might bring.

Hope this helps out. Happy trading!